NMDC Resumes Iron Ore Price Hikes After A Month
NMDC Ltd. resumed price hikes after a month even as international rates cooled off.
The nation’s largest iron ore miner raised prices of lump and fines by Rs 250 and Rs 100 a tonne, respectively, according to an exchange filing. That’s a 5% and 2.4% hike, respectively, over the preceding month. NMDC in February had slashed prices to their lowest in two months and kept them unchanged in the first half of March.
The hike seems to have been driven by improving realisations across the secondary rebar market, said Amit Dixit, assistant vice president-research at Edelweiss Securities. “Also, we have seen the primary market for both rebar and HRC (hot-rolled coil) stabilising. That said, last time NMDC’s price cut in February was quite steep. Hence, we expected partial rollback. Going ahead, a lot will depend on a ramp-up in Odisha,” he told BloombergQuint.
NMDC’s hikes, according to Steel Mint, happened right after Odisha’s Essel mining raised prices of lumps by Rs 500 a tonne. Usually, the state-owned miner follows the trend by Odisha-based iron ore producers.
According to Rakesh Arora, managing partner at Go India Advisors, the iron ore price trend is expected to remain firm. “International iron ore pellet stands at Rs 14,000 a tonne, ex Raipur, as compared to domestic pellet price of Rs 12000 a tonne. This differential has forced pellet manufacturers to push higher exports, leading to shortages of high-grade material,” he told BloombergQuint. “Domestic steel producers are substituting pellets with lumps leading to jump of Rs 1,000 a tonne in bid prices in latest NMDC auction. Also, the ramp-up of auctioned mines is still slow, leading to general tightness in domestic iron ore supply. This situation is unlikely to resolve in the near term.”
International Dalian Iron ore prices, however, have moderated in March.
China’s iron ore market has been bracing for pollution curbs on steelmakers in Tangshan province to become the new normal after local authorities announced plans to impose production controls on 23 mills from March 20 to Dec. 31 to lower emissions by 30-50%, S&P Global Platts said in a report.
Shares of NMDC were trading 1.23% higher at market open compared with a 0.45% drop in the benchmark Nifty 50.