State-owned iron ore miner NMDC on Tuesday slashed iron ore prices by Rs 500 per tonne for both lump and fine varieties on subdued demand from the steel industry.
The decision to cut the price comes on a 40% drop in sales for the country’s largest iron ore producer in June, compared to 3.18 million tonnes in the same month of the previous fiscal, to just 1.9 million tonnes (mt). . NMDC’s sales declined 20 per cent year-on-year in the first quarter of the current financial year.
“Demand from the steel industry has been weak. “We also had some inventory,” NMDC CMD Sumit Deb told FE. Iron ore is an important raw material for steel making, requiring approximately 1.5–1.6 tonnes of raw material for each tonne of metal produced.
NMDC’s lump sum ore will now cost Rs 3,900 a tonne for the third time in the current financial year after the reduction, while fines or low grade iron ore will cost Rs 2,810 a tonne.
Before the latest price revision, NMDC had reduced the price of steelmaking material by up to Rs 1,000 per tonne with effect from June 5. On April 1, NMDC’s lump sum ore was priced at Rs 6,100 per tonne and fines at Rs 5,160 per tonne.
NMDC is the largest merchant miner in the country. About 70% of its annual sales, 40.5 million tonnes in FY22, are procured by three major steel firms – JSW Steel, AM/NS India and state-owned Rashtriya Ispat Nigam (RINL). NMDC had a share of around 20 per cent in the domestic iron ore market in the last financial year.
NMDC’s entire sales in FY22 was in the domestic market, which is facing duty on export of iron ore, raised to 50% from 30% before May 22.