NMDC cut iron ore prices by 2-11 per cent for October, in a development that will provide some relief to steel producers.
Steel makers have been seeking a reduction in iron ore prices, especially as global prices have softened in recent weeks.
The steel companies may pass on a slice of the ore price reduction to their customers.
In another significant move, NMDC has decided to fix iron ore prices for domestic customers on a monthly basis from this month.
The iron ore miner has been following a three-month pricing formula based on domestic demand and supply of the critical raw materials.
International consultant
NMDC is in the process of hiring an international consultant to recommend a new iron ore pricing mechanism, after studying the different models followed in other countries.
For the July-September quarter, the company had increased prices by about 8-13 per cent and about Rs 250-400 a tonne for the previous quarter, despite global prices remaining more or less stable for the last three months.
C.S. Verma, In-charge Chairman, told mediapersons last month that ore prices are expected to remain under pressure for the next six months.
Iron ore prices have fallen from an average of about $200 a tonne a year ago to about $150 six months ago and below $100 a tonne last month.