India’s Largest Iron Ore Miner To Focus On Volume, Market Share
Will NMDC lower iron ore prices after Serajuddin Mines in Odisha resume supply?
India’s largest producer of iron ore hit a pause after increasing prices for two straight months as mines in Odisha resumed supply.
Strong demand, not supply shortage, allowed state-run NMDC Ltd. to hike prices, TRK Rao, director (commercial) at the Navratna company, one of the government’s nine jewels, told BloombergQuint. Since Odisha supply is coming back and the end- user prices —steel and sponge iron—remain stable, strategies need to be decided, he said. “NMDC would definitely continue to focus on volumes and increasing the market share.”
The Supreme Court allowed Serajuddin Mines in Odisha to resume operations on Feb. 23, according to Steel Mint, an industry market intelligence provider. The second-largest miner in Odisha has around 10 million tonnes a year capacity and has an environmental clearance for 15.15 MTPA. The top court had also allowed Essel Mining to resume operations on Feb. 15.
That raises a doubt about NMDC’s ability to sustain the price hike of December and January. It had increased lump and fine prices by 19 percent and 22 percent, respectively, in January after a 13 percent and 9.7 percent hike in December. The company maintained prices in February.
It is unlikely the company will completely roll back the price hikes of the last few months given the strong seaborne iron ore prices and improving domestic demand, Macquire said in a note. Still, prices could soften after peaking out in the previous few months, it said.