Public sector mining company NMDC Ltd will take a call on iron ore pricing for the December quarter at its board meeting on October 1, amid concerns that prices are already high compared to international benchmarks.
“There are pricing pressures internationally and India cannot be insulated from the effects of those pressures though the domestic demand is good,” said SAIL Chairman and Managing Director C S Verma, who also holds the additional charge as chairman-cum-managing director of NMDC. However, he declined to comment on whether the company was planning to lower the prices.
In a related move, NMDC has also decided to rope in an international consultant for devising a proper and professional pricing policy in place of the pricing formula currently followed by the company, according to Verma.
The current formula, which is based on the domestic supply-demand dynamics, has drawn criticism after NMDC’s prices stayed higher when the international iron ore prices were going down.
Speaking to reporters after the annual general meeting of the company here today, Verma said the NMDC board might also choose to tweak the current pricing formula without waiting for the consultant recommendations at the next board meeting.
However, he defended NMDC’s current stance on pricing and said the company accounted for only 17-18 per cent of the iron ore production in India and, therefore, its pricing policy should not be of too much worry to the steel sector.
He said there was a need to explore upcoming concepts like iron ore trading through commodity exchanges as practised in China.
Currently, the country produces 170-180 million tonnes (mt) of iron ore, of which domestic consumption is pegged at 120-125 mt, while the remaining is being exported to other countries including China.
