India’s biggest iron ore producer, NMDC, has announced a price cut of about 10-12% in iron ore for the month of Jan’19. Market participants were expecting a price cut looking at aggressive price cuts done by Odisha miners. Backed by successive price cuts by Odisha iron ore merchant miners, led NMDC to reduce iron ore offers from its Chhattisgarh mines on competitive pricing measures. Last month NMDC had slashed iron ore price between INR 450-785/MT for Dec’18 via two successive price cuts announced.
Which all factors resulted in NMDC iron ore price cut?
1. Odisha miners’ ramp up production; prices fall – Merchant miners in Odisha had cut iron ore prices consistently from Nov’18 on increased production and falling steel and DRI prices. Key merchant miners in Odisha are looking at scaling up their iron ore production in order to utilize their remaining Environmental Clearance (EC) approved for the financial year 2019 (Apr 2018 – Mar 2019).
2. Pellet offers under pressure amid limited export bookings – Domestic pellet prices in India have weakened on lowered export bookings. In eastern India pellet prices have come down by INR 800-1000/MT in a month’s time.
3. Rising iron ore imports – According to data maintained with SteelMint, Indian iron ore imports have increased to 15.66 MnT in CY18 against 5.5 MnT in previous year. Further appreciation in Indian Rupee against USD coupled with falling global iron ore prices has improved import parity.
NMDC Chhattisgarh’s Iron Prices as on 02 Jan’19
|Material Type||Current Price (in INR)||Current Price (inUSD)||Change ((against last price) in INR/MT)||Change in %|
Prices on For siding basis
Royalty (15%), DMF (4.5%), NMET (0.3%), & other taxes extra
Indian iron ore imports cross 15 MnT mark in CY18, will the momentum continue?
NMDC’s announcement of temporarily suspending operations at Donimalai in Karnataka does not seem set for a quick resolution with the Centre intervening to broker peace between the miner and the Karnataka government. As per the senior state-level officials, NMDC has approached the Karnataka High Court for an urgent hearing on NMDC Donimalai lease renewal pending decision on the representation by the Karnataka Govt. As per the reports, Court will hear the matter on Jan 10, 2019. Iron ore import volumes to India have already crossed 15 MnT mark in CY18 and it will be interesting to see whether NMDC Donimalai suspension increase import volumes further?
3rd Indian Iron Ore and Pellet Summit, 18-19th Feb, Delhi NCR
Keen to keep a track of global and national iron ore prices in the coming year. To get more insights on the Indian Iron Ore & Steel Industry, participate in the 3rd Indian Iron ore and pellet Summit, 18-19th Feb 2019, Delhi NCR.