NMDC, the country's largest iron ore producer, has cut prices of fines (Fe grade) and lumps by 20 per cent and 3 per cent respectively in the light of fall in international prices of ore.
NMDC sources told Business Standard that the price of iron ore fines and lumps now would be around Rs 2,600 and Rs 5,000 a tonne. Currently, NMDC is selling fines at Rs 3,380 a tonne and lumps at Rs 5,100. The price of lumps in the international market is round Rs 7,000 a tonne.
Though NMDC said a price drop was being examined, the reduction seems to be higher than expectations. The company sources had earlier indicated that the price drop would be ‘marginal’.
“The price cut by NMDC is higher than our expectations given the shortage of iron ore in the domestic markets (especially iron lumps) on the back of mining ban in the Karnataka region and government's stricter stance on illegal mining in other regions such as Goa and Orissa,” online share trading portal, Angel Broking, stated.
So far, the domestic prices have remained steady despite a decline in international prices due to shortage of ore. On the export front, the fall in prices will not have any impact on NMDC as it is not exporting any ore this year.
NMDC accounts for 25 per cent of iron consumption in the country. In 2010-11, the public sector undertaking had sold 23.75 million tonnes of ore, while the total requirement of domestic industries was 100 million tonnes.
