Government-owned miner NMDC
might cut iron ore
prices by Rs 500-700 a tonne for the month of April, to align prices of the steelmaking raw material in India and abroad.
For March, NMDC
had cut these prices by a mere Rs 100 a tonne across both lumps and fines, to Rs 3,000 a tonne and Rs 2,660 a tonne, respectively. It had raised prices substantially after a Supreme Court
order to shut mines in Odisha
with annual capacity of 25 million tonnes. This resulted in a supply shortage.
Since then, a majority of these Odisha
mines have recommenced operations, easing the supply. Private miners
that had raised prices in January have started cutting these.
“In March alone, private iron ore
miners cut by Rs 800-1,000 a tonne, following increase in its supply across the country. So, NMDC
might cut for April by at least Rs 500-700 a tonne,” said Vijay Jhawar, president, Chhattisgarh Sponge Iron Manufacturers Association.
According to trade sources, the difference in ore prices between private miners
is currently Rs 850 a tonne.
Prices in March also declined substantially in global markets. The benchmark 62 Fe fine (62 per cent iron content) slumped 18 per cent to $62.25 a tonne, on sudden increase in supply.
“The pricing policy of NMDC
continues to be a matter of concern for Indian steel, including sponge iron manufacturers which are dependent on this government-owned company for iron ore,” said a senior industry official.
The existing ore price also faces pressure from steel pellets, traded currently at Rs 5,000 a tonne in the Durgapur and Jamshedpur area. Prices of pellets fell around Rs 1,000 a tonne in March.
“Hence, a cut in iron ore
prices would help NMDC
sell to steel makers. Otherwise, steel mills
would intensify iron ore
import,” said Jhawar.
Also, the steel ministry had asked NMDC
to raise iron ore
output to 67 million tonnes annually by 2021-22. According to industry sources, NMDC
has started increasing its production.
needs to cut iron ore
prices. This will also keep pressure on steel mills
to cut prices or at least hold on to price increases,” said a senior official at one of the large steel company. Steel mills
had, with a rise in demand for their products, been raising their prices, citing a rise in cost of production, among other reasons.