NMDC cuts prices of lump ore by Rs 1,100 per tonne, fines by Rs 1,000

The country's largest iron ore miner NMDC has made a sharp reduction of Rs 1,100 per tonne in the price of lump ore and Rs 1,000 in case of fines.

The prices are effective from June 5, 2022, the company which is also the largest seller of the mineral said in a regulatory filing on Monday.

Iron ore is one of the key raw materials used in the manufacturing of steel, and any movement in the prices of the mineral has a direct impact on the rates of steel, which has been a matter of concern for the user industries for past couple of months.

According to the filing, the company has fixed the prices of per tonne lump ore at Rs 4,400 and that of fines at Rs 3,310 a tonne.

While lump is high-grade iron ore having Fe (iron) content above 65 per cent, fine is inferior grade ore which needs beneficiation.

The revised prices are effective from June 5, 2022, and exclude royalty, District Mineral Fund (DMF), National Mineral Exploration Trust (DMET), cess, forest permit fee, and other taxes, the company said.

NMDC had last made a price revision on May 25, when it had fixed the prices of lump ore and fines at Rs 5,500 per tonne and Rs 4,410 per tonne, respectively.

Mukesh Kumar, who heads the Steel Research & Technology Mission of India (SRTMI), attributed the fall to the "inventory levels that have built up as production exceeded consumption in FY22".

India produced about 250 million tonnes iron ore in FY22 and consumed about 192 MT of the mineral for steel making. There is an inventory of over 50 MT, he said.

When asked about the impact of the rate cut on prices of steel, Kumar said, "Definitely it will have an impact. The prices would reduce in the range of Rs 2,000-Rs 2,500 per tonne."

He further said that the issue of rakes continues to hit the steel makers as rakes are being diverted for coal supplies in the power sector, as a result players are facing issue of transportation of raw materials and finished products.