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

NMDC’s monthly revision for November 2022 is expected to come soon, SteelMint learnt from sources.

Last month, India’s largest merchant iron ore mining company kept iron ore prices unchanged. 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.

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

SteelMint has studied NMDC’s price data for the last five years to identify 21 parameters/ influencers which, it feels, are highly correlated, directly or indirectly, with its iron ore price movements.

The predicted 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 12 parameters, 5 are reflecting a downtrend at present, six are showing positive, and one remains unchanged. However, dispatches increased last month by around 20%.

Factors impacting NMDC’s iron ore prices

• Odisha iron ore prices inch up: SteelMint’s weekly Odisha iron ore fines index Fe 62% edged up by around INR 100/t m-o-m to INR 3,600/t ex-mines, while the Fe 63% lump (Odisha) index also rose marginally to INR 7,000/t ex-mines on 29 October.
• NMDC’s iron ore rake movements rise: NMDC recorded iron ore rake movements from Chhattisgarh at 403 in October, rising by 20% as against 336 in September, according to SteelMint data. The figure includes movements within Chhattisgarh and to other state-based units but excludes supply to AM/NS India through slurry pipeline. Notably, a rake carries 3,850 tonnes (t) of iron ore.
• Primary mills’ HRC, CRC prices stable : The primary mills have kept their HRC, CRC prices stable for early November sales on expectations of better demand during the month. The third quarter (Q3) is traditionally a good one from the construction demand perspective, and hence mills are bracing for good demand pull which will support prices.
• Global iron ore prices drop to almost three-year low: Global iron ore fines prices have fallen to around three-year low on weak steel demand. A steep drop in global prices has resulted in mills raising enquiries for imported cargoes. Benchmark Fe 62% fines prices were recorded at $80.15/t CFR China on 1 November.