India: NMDC hikes iron ore prices by up to INR 350/t for Feb deliveries

India’s largest iron ore miner, NMDC, has raised prices by INR 200-350/t ($3-5) for Feb’22 deliveries, SteelMint learnt from sources. The revised offers are as follows:

• DR CLO (10-40mm, Fe 67%) – INR 6,040/t (+350/t)
• Baila fines (Fe 64%) – INR 4,260/t (+200/t)
• Prices are on FOR basis, excluding royalty and taxes.

Factors behind the price hike:

• Hike in Odisha iron ore prices on tighter supplies of high-grade – SteelMint’s weekly Odisha iron ore fines index (Fe 62%) moved up further by INR 400/t, w-o-w and stood at INR 5,300/t ex-mines on 29 Jan’22. Offers rose this week owing to limited high-grade material availability from the merchant miners who have largely exhausted their EC limits. Prices have risen by INR 500-600/t m-o-m.
• Aggressive participation in NMDC’s recent auction -NMDC conducted an auction on 19 Jan’22 for nearly 320,000 t of iron ore from the Kirandul and Bacheli mines in Chhattisgarh. The auction received good response for lumps, with the entire quantity of DR-CLO getting booked, sources told SteelMint. Bids for DR-CLO increased by around INR 1,580-1,670/t, while those for Baila lumps, fines and run of mine (ROM) ore remained at the base price level.
• Global iron ore prices at five-month high– Chinese spot iron ore fines Fe 62% prices opened at $133.7/t CNF China for the week and assessed at $147.9/t, CNF China towards the weekend. On an m-o-m basis, prices have risen by around $30/t. Prices are hovering at five-month highs. Seaborne iron ore prices rose on a positive demand outlook ahead of the Lunar New Year holidays, Winter Olympics, coupled with monetary easing and surge in futures.
• Indian pellet prices rally on higher exports -SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 12,150/tonne (t) DAP Raipur on 28 Jan’22. Recovery in export sentiments and rising coal and sponge iron prices pushed pellet offers higher. India’s pellet (Fe 64%, 3% Al) export index (FOB east coast) has risen to over five-month highs to $166/t.
• Price support from finished steel -Indian steel majors have increased the list prices of hot rolled coils (HRCs) and cold rolled coils (CRCs) by INR 500-750/t ($7-10/t) for end -Jan’22 sales. The price hike was implemented in the past couple of days, SteelMint learned from reliable market sources.