Even as NMDC’s net sales realisation and ore prices are already at a five-year low, the state-run iron ore miner has slashed rates yet again...
Even as NMDC’s net sales realisation and ore prices are already at a five-year low, the state-run iron ore miner has slashed rates yet again for the current month due to poor offtake by domestic steelmakers and fall in prices of the mineral globally.
The country’s largest iron ore miner has reduced the price of lumps by over 14% to Rs 2,500 a tonne for October compared with Rs 2,850 a tonne in September. The price of fines has also been slashed by 12 % to Rs 1,460. The prices of lumps and fines were Rs 4,600 a tonne and Rs 3,160 per tonne respectively a year ago.
Sales were also down to its lowest in the last three years at 13.11 MT during April-October compared to 15.85 MT and 13.76 MT respectively in the immediate past two years.
Production was also at a three-year low at 12.37 MT during the first six months of this fiscal compared to 14.44 in FY14 and 12.86 in FY15.
“We fix the price weighing the demand-supply situation. There is more supply than demand now. The price cut was thus warranted as demand is not picking up,” said a company official.
The demand for iron ore has been on the wane as steel firms are not producing to their potential due to suppressed market condition. Steel consumption in the country has been anaemic as a result of poor off-take from the consuming sectors such as construction and automobiles. While construction, which consumes more than 60% of the country’s total steel, is not in full-swing thanks to a depressed real estate market, the automobile sector has also been volatile.
Presently, one-fourth of the 2 billion tonne of global steel industry is surplus.