Market participant expects NMDC, India’s largest iron ore producer, may cut iron ore lump and fines prices for Nov’15 bookings.
According to market sources, NMDC might cut iron ore lumps upto INR 300-500/MT for November deliveries, looking at the consecutive price cut by Odisha merchant miners and pressurized sponge iron ore prices which have already hit rock bottom. Will this price cut able to give oxygen to sponge makers? Question remain unanswered.
Market sources also gave indication that due to low realisation to NMDC in iron ore fines exports, company may reduce fines prices by INR 200-300/MT to increase the domestic booking. However, the company has long term export agreement (LTA) signed with South Korea and Japanese mills and liberalization in the differential export duty of 20% for NMDC may keep iron ore fines export intact. Also, the company intends to export quantity in the range of 3.8 to 5.5 MnT iron ore.
Other factors which may support NMDC to reduce iron ore prices for November’15 deliveries are:
- International iron ore prices hit three months low. China iron ore fines Fe 62% prices is below USD 49/MT.
- Sponge iron ore prices have witnessed a fall of INR 1500-2000/MT in a months time. Prices have hit a rock bottom levels of INR 11,500-13,700 /MT
- Odisha based merchant miners corrected iron ore lump prices upto INR 200-300/MT
- NMDC’s Karnataka e-auctions received lukewarm responses
- Iron pellet prices down by INR 500/MT M-o-M and prevailing at INR 4,400-4,500/MT in Central India.
- C.G based sponge makes mention they have not booked any material from 19th Oct’15 onwards.
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