National Mineral Development Corporation (NMDC), Nations largest and state controlled miner of Iron ore with 30 million tonnes per annum (MnTPA) production capacity is expected to revise Iron ore prices for August today.
NMDC revises its Iron ore prices on a monthly basis considering the demand and supply factor, most importantly.
SteelMint thinks that Iron ore lumps offers should come down by at least Rs 200-250/MT (4-4.5%).
Whereas, Iron ore fines prices might be untouched at current levels as off take from long term customers and in e-auctions is taking place in good quantities.
NMDC's July Iron ore prices:
6-40 mm & Fe 65 Kirandul lumps Rs 4,400/MT, drop of Rs 200/MT
10-150 mm & Fe 64 Bacheli ROM Rs 3,830/MT, down by Rs 170/MT
Fe 64 Iron ore fines Rs 2,510/MT, drop of Rs 100/MT
10-140 mm & Fe 67 DRO-CLO Rs 5,060/MT, down by Rs 230/MT
Basic prices, excluding royalty and taxes
We support our analysis on the following reasons:
In the past one month, Iron ore miners based in the state of Odisha lowered lumps prices in the range of Rs 400-900/MT and maintained fines prices at more or less similar levels.
Supply of Iron Pellet in Indian domestic market is increasing and Sponge iron making plants prefer to purchase Pellets instead of lumps due to lower production cost by about Rs 300/MT and high recovery by around Rs 600/MT.
Sponge iron units in Chhattisgarh also have to bear higher landed cost for NMDC's lumps by about Rs 1,000/MT when compared to lumps being purchased from Odisha.
Users of NMDC's Iron ore lumps are hopeful of some correction in prices by about Rs 300/MT as monsoons have impacted the quality of Iron ore.
For more details, contact
Seema Goenka
(seema@steelmint.com)
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