India: NMDC raises iron ore price by up to 10% for Jan’21 on improved sales

• Last month, company’s fines had already hit an all-time high while lumps have now hit an eight-year high in prices.
• In its Dec’20 auctions from Chhattisgarh mines, bids were received above the set base price.
• The revised prices for Baila fines (Fe 64%) stands at INR 4,810/t, Baila lump (Fe 65.5%) is assessed at INR 5,700/t and DR CLO (Fe 67%) at INR 6,620/t.

India’s state-owned iron ore miner – National Mineral Development Corporation (NMDC) has announced price hike in iron ore for Jan’21. Prices have increased further up to 10% for its Chhattisgarh based mines. In the month of Nov and Dec’20, NMDC had increased iron ore prices twice.

The miner has raised the price for Baila fines and lump by around INR 200/t and INR 500/t respectively while that of DR CLO by INR 580/t. Last month, company’s fines had already hit an all-time high while lumps have now hit an eight-year high in prices.

The revised prices for Baila fines (Fe 64%) stands at INR 4,810/t, Baila lump (Fe 65.5%) is assessed at INR 5,700/t and DR CLO (Fe 67%) at INR 6,620/t. NMDC sets prices on a free-on-road (FoR) basis and does not include royalty and taxes.

Reasons behind hike in prices –

• Improved iron ore sales in Dec’20-NMDC recorded iron ore sales of 3.62 mn t in Dec’20 compared with 3.3 mn t in Nov’20.NMDC’s iron ore rake movement from its Chhattisgarh mines to state-based steel units has moved up 6% to 82 rakes (0.32 mn t) in Dec’20 compared to 77 rakes (0.30 mn t) a month ago, as per railway movement data maintained with SteelMint.
• Improved bids in recently conducted NMDC’s auction –NMDC conducted two iron ore auctions on 30 Dec’20 for around 100,800 t from its Bacheli mines and 25,200 t from its Kirandul mines, Chhattisgarh. Offered material comprised of 71,400t fines, 16,800t ROM, 29,400t DR CLO and 8,400t lump. Bids for DR CLO increased sharply by around INR 3,700/t and fines by INR 200/t above the set base price, sources reported SteelMint.
• Pellet prices in Raipur rise significantly –SteelMint’s domestic pellet price index has increased further by INR 600-700/t m-o-m to INR 12,200/t DAP Raipur by early Jan’21.
• Sponge iron prices in Raipur hike further INR 1,600/t ($22) –Both the P-DRI add C-DRI Sponge iron (C-DRI) prices in Raipur have increased around INR 1,600/t in a month’s time to INR 26,600/t and INR 27,600/t respectively exw Raipur.
• Iron ore import prices on rise following hike in global prices –Spot iron ore Fe 62% fines price strengthened further by $2.65 d-o-d to $167.15/t CFR China, supported by strong buying interest and rising iron ore futures market. In a month’s time, prices have rallied by around $15-20/t.
• Indian steel mills hike finished steel prices –Indian steel mills like JSW Steel, SAIL, Tata Steel, AM/NS India etc. have announced a hike in finished steel prices by around INR 2,000-4,000/t this week on demand-supply imbalance.