National Mineral Development Corporation (NMDC) Limited is likely
to reduce the prices of ore during this week in the meet scheduled in Chennai on Thursday. NMDC
sources, however, told Business Standard that the drop in prices would not be
“much”. According to them, there could be “some reduction”
in the price of fines (Fe grade) but “very marginal” drop in the
price of iron ore lumps which have a good demand in the domestic market.
They
said that even though there was no case for a drop in the price of lumps, the
public sector undertaking might consider a slight reduction in price in the
light of a significant drop in international prices of ore. In August prices
were around $180 per tonne, which are now quoted at $145 per tonne with short
term bias towards going up.
Currently,
NMDC is selling lumps at around Rs 5,635 and fines at Rs 3,230 a tonne.
On the other hand, the price of lumps in the international market is hovering
around Rs 7,000 a tonne, about Rs 1,500 less than the price prevailed during
the second quarter of this financial year.
On
the export front, the reduction international prices of ore do not have any
impact on NMDC as it is not exporting any ore this year. It's agreement
pertaining to the export of ore to the Japanese market has been expired and it
is yet to be revived by the Union Cabinet.
NMDC
accounts for 25 per cent of the total iron ore consumption in the country. In
2010-11, the Navaratna company had sold 23.75 million tonnes of ore, while the
total requirement of domestic industries stood at around 100 million tonnes.
In
Karnataka last year, the Supreme Court allowed NMDC alone to operate its mines
to the extent of providing 1 million tonnes per month to the domestic steel
industry. The order of the apex court had made it possible for the company to
restart its Kumaraswamy mines also ( apart from Donamalai mines) where mining
was stopped for quite some time due to Karnataka High Court order.
Source: Business Line
Leave a Reply