Indian mining company National Mineral Development Corporation (NMDC) has raised iron ore prices by Rs300-400/mt ($4-5/mt) for rest of November deliveries. This is the second price hike by the company this month. The company had raised iron ore prices by Rs150/mt ($2/mt) earlier this month.
NMDC’s iron ore lumps are now priced at Rs4,000/mt ($54/mt) and fines at Rs3,610/mt ($49/mt) effective November 17, according to a company release.
The company has been raising iron ore prices since June-end in line with high international iron ore prices, continuous shortfall of iron ore in the domestic market. The price rise is also supported due to the increase in iron ore pellet exports in the first half of FY21. Since June-end till now, NMDC’s total price hike is around Rs 1,450-1,550/mt ($20-21/mt) for fines and lumps.
Looking at the international iron ore prices in the spot market, prices have surged from about $80/mt CFR China in April 2020 to around $125/mt. On similar lines, iron ore pellet prices in domestic market reached a record high of Rs11,700/mt, a jump from Rs6,000/mt in mid-April.
NMDC’s Donimalai mines which was cleared by the Karnataka government on September 15 for mining operations and was expected to start in October, is still stalled due to pending formalities, as mentioned in the recent company’s earning conference call.
Impact on Sponge iron
Sponge iron makers in Raipur informed that due to sharp hike in iron ore and pellet prices in the month, Sponge iron ore prices have increased. This will severely hit downstream industries like Induction Furnaces (IF), Electric Arc Furnaces (EAF) and rolling mills units due to extreme cost pressure and shortage.
Presently, pellet Sponge prices are at around Rs25,500/mt ex-works Raipur, which was around Rs22,000/mt in early-November. Industry leaders believe that Sponge prices will remain firm in the near term till supply remains tight.