Higher volumes to cushion NMDC, risks to pricing remain

Good volume growth and attractive valuations are keeping analysts positive on the stock

Government-owned mining entity NMDC’s performance for the quarter ended September reflects the prevailing weak iron ore pricing trend.
 

Expectations of a cut in Chinese steel production during the winter season, thereby muting iron ore demand, is putting pressure on the commodity’s prices. The per-tonne ore price (ex-China) has fallen from about $95 in February to $62.

As a result, NMDC’s stock price has fallen from Rs 152 in early March to Rs 125.3 now. Moving forward, while volatility in iron ore prices might continue, growing volumes could provide support, feel analysts. They also say the valuations have become attractive, keeping