India: NMDC rolls over iron ore prices for September

India’s largest merchant iron ore mining company, NMDC, has kept iron ore prices unchanged for September 2022 deliveries, SteelMint learnt from reliable sources.

NMDC fixed prices for lump iron ore (65.5%, 6-40mm) at INR 4,100/t, DR CLO (Fe 67%, 10-40mm) at INR 4,920/t and iron fines (64% – 10mm) at INR 2,910/t with effect from today.

Reasons for potential price freeze

• Odisha iron ore prices stable w-o-w: SteelMint’s weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 3,400/t ex-mines, as assessed on 3 September.
• China iron ore prices dip on poor demand outlook: The spot price of iron ore in China decreased on 7 September amid bearish market sentiments. Benchmark Fe62% fines prices moved down by $0.40/t to $96.90/t CFR China. On a m-o-m basis, prices have come down by $12/t. According to several sources, factors such as the decline in the iron ore paper market and unfavorable foreign exchange rates contributed to a cautious stance in the seaborne market.
• Seasonal impact: During monsoons, shortage in iron ore impacts the supply side. India’s iron ore production is down sharply by 16% to 19.14 mnt in June against 22.69 mnt in May.
• NMDC’s iron ore rake movement from Chhattisgarh sharply up in Aug: NMDC recorded iron ore rake movements from Chhattisgarh at 291 in August 2022, up sharply by 71% against 170 in July, according to data maintained with SteelMint. The figure includes movements within Chhattisgarh and to other state-based units but excludes supply to AM/NS India through slurry pipelines. Notably, a rake carries 3,850 t of iron ore. Its rake movements to Chhattisgarh-based units were recorded at 41 in August compared to 34 in the previous month.
• DR CLO lots in NMDC’s auction receive good response: NMDC had scheduled an iron ore auction from Chhattisgarh recently for 159,600 t of Fe 64-67%, indicative, from Bacheli mines, and 134,400 t (Fe64-65.50%, indicative) from the Kirandul mines. According to market sources, the entire quantity of 16,800 t of DR-CLO was booked at INR 5,587/t against the base price of INR 4,957/t and one lot of Baila lumps was booked at a base price of INR 4,131/t. All prices are on FoR basis, royalty, DMF & NMET extra.