Amid subdued demand from domestic steel-makers, iron ore producer NMDC has effected yet another stiff price reduction for February to align them with the prevailing weak global rates.
The reduction of Rs 300 per tonne of lumps or higher grade iron ore and Rs 500 per tonne in fines, which contain less iron, comes after miner had slashed rates by Rs 450 a tonne and Rs 300 a tonne, respectively in February.
Following the reduction in the rates, the price of lump ore now stands at Rs 3,250 a tonne and fines Rs 2,460 a tonne for the current month.
NMDC revises the prices of its produce every month.
“Globally, the prices of iron ore have also come down drastically. We need to align our prices with international rates otherwise imports will go up. Besides, iron ore prices in Odisha have also fallen,” NMDC’s Chairman and Managing Director Narendra Kothari told PTI.
Kothari added that the demand for the raw material from domestic steel firms was also on the wane since their inventories were piling up.
Country’s largest iron ore producer, NMDC, had rolled over the December price in January at Rs 4,200 per tonne for lumps and Rs 3,060 per tonne for fines. In December, the PSU had reduced the price of lumps by Rs 200 per tonne and Rs 100 per tonne for fines.
After tumbling prices to their five-and-a-half-year low in the first week of February, iron ore prices have slightly improved to a little over USD 65 per tonne.
Cashing in on the subdued rates, domestic steel-makers have started importing iron ore in large quantities.
Iron ore producers in Odisha have also reduced the price of the raw material which has been putting pressure on NMDC for quite sometime now.
Kotahri also said as a result of subdued demand from the domestic steel-makers, sales of the company were not growing on the expected lines.
This might have also exerted additional pressure on the miner to effect the huge price reduction for two consecutive months.
NMDC sold just 1.88 million tonnes (MT) iron ore in February and its cumulative sales for the first 11 months of current fiscal stands at 27.25 MT compared with 27.13 MT a year earlier.
The reduction in the prices of iron ore for two straight months is expected to impact on the net sales realisation of the company and its bottom line for current quarter, experts said.