The State-owned miner NMDC has slashed the price of higher grade iron ore (lumps) by about seven per cent for the current month.
This is the fifth reduction since last October in iron ore lump prices by NMDC.
However, the company has not changed the price of iron ore fines (lower grade) for the second month in succession.
“The company Board, in its meeting yesterday in Delhi decided to cut the lumps prices by about seven per cent for the current month. It, though, kept the fines prices unchanged,” S Thiagarajan, Director - Finance, NMDC added.
NMDC had lowered the price of lumps by about 2.5 per cent last month.
Domestic steel makers, those without captive iron ore mines, will be benefited the most due to the price reduction of iron ore lumps (having iron content of 62 per cent or above).
After the price cut, iron ore lumps would be available in the range between Rs 4,600 and Rs 4,700 per tonne, while fines (having iron content of less than 60 per cent) are currently being sold at Rs 2,610 per tonne.
Since October, NMDC, the largest domestic producer of iron ore has either reduced the iron ore prices on a monthly basis or kept them unchanged as demand has been subdued.
The slowdown in Indian economy has also had a trickle down effect on the market as steel demand grew by just 4.4 per cent in the last fiscal due to end-users such as construction, automobiles and fast moving consumer durables running below their optimum capacities.
In terms of quantity, NMDC’s sales of iron ore had declined by 17 per cent to 5.3 million tonnes (MT) in Q3, while the production was down 25 per cent at 5.4 MT during the period.
The company has a total production capacity of 32 MT per annum at its mines in Chhattisgarh and Karnataka.