India: Will NMDC revise iron ore prices for March dispatches?

NMDC’s monthly price revision for March 2023 is expected to come soon, as per sources. 

India’s largest merchant iron ore mining company raised prices of lump ore by up to INR 300/tonne (t) and fines by INR 500/t on 28 January. The miner had fixed prices for lump iron ore (65.5%) at INR 4,800/t, DR CLO (Fe 67%, 10-40mm) at INR 5,820/t and iron fines (64% – 10mm) at INR 3,910/t (FOR prices from Bacheli complex, excluding royalty, DMF and NMET).

SteelMint has started a new feature of predictive analysis a few months ago wherein the correlation between certain “predictors”/parameters/market or price influencers suggests an indication of future price movements of a particular commodity.

SteelMint has studied NMDC’s price data for the last five years to identify 11 parameters/ influencers which, it feels, are highly correlated, directly or indirectly, with its iron ore price movements.

The predictive price estimation is based on data metrics and co-relations that impact the company’s pricing decision such as domestic and global iron ore prices, prices of metallics as well as domestic semi-finished and finished steel.

In the current study, out of 11 parameters, 6 are reflecting an upward trend at present while 4 are showing a downward trend while one remains unchanged.

Factors impacting NMDC’s prices

• Odisha iron ore prices increase m-o-m: SteelMint’s Odisha iron ore fines (Fe62%) index rose by around INR 475/t m-o-m to INR 5,475/t ex-mines (including royalty, DMF, and NMET). Post OMC iron ore auctions held on 16 February, prices have increased sharply on the back of the low availability of high-grade fines in the market. As per sources, most small merchant miners have less material to offer as they are exhausting their EC limits before the fiscal year-end, which has affected supply.
• Pellet export prices rise m-o-m on active trade: India’s pellet export trade improved further. SteelMint’s India pellet (Fe63%, 3% Al) export index, FOB east coast, was recorded at $122/t, up by $7/t m-o-m. Indian pellet export prices have increased on the back of a hike in global iron ore prices as China’s real estate market is expected to rebound with the help of more stimulus by the government. Indian mills concluded around three pellet export deals last week. A couple of deals were heard concluded from an Odisha-based producer for 110,000 t of pellets (Fe63%, 3% Al) at $138-139/t CFR China for March shipment. Another pellet-maker concluded a 55,000 t pellet (Fe64%, 7% SiO2+Al2O3) deal at $136-138/t FOB.
• Global iron ore prices edge up: Monthly average prices of benchmark Fe 62% fines moved up by around $3/t m-o-m to $126/t CFR China.
• HRC prices rise m-o-m: Trade prices of hot-rolled coils (HRCs) have been on a rise in February. SteelMint’s price assessment shows a sharp increase of INR 1,725/t ($21/t) in the Mumbai market.
• Sponge iron prices drop m-o-m: Sponge iron prices witnessed a significant drop this month due to low buying interest amid higher offers. SteelMint’s price assessment for sponge iron (PDRI) stood at INR 31,600-31,700/t exw Raipur, down INR 500-600/t m-o-m.