Indian mining company National Mineral Development Corporation (NMDC) has raised iron ore prices by Rs500-700/mt ($6-10/mt) for the rest of December deliveries. This is the second price hike by the state-owned company this month, having raised iron ore prices by Rs500/mt ($6.79/mt) earlier.
NMDC’s iron ore lumps are now priced at Rs5,200/mt ($70.7/mt) and fines at Rs4,610/mt ($62.67/mt) effective December 15, according to a company release.
The company’s iron ore prices have doubled since June-end, with a 112-113pc rise in lumps and fines.
The sharp NMDC price hike is due to various factors –
- There was a spike in international iron ore prices which reached around $160/mt (cfr China), a 60pc rise since June-end due to strong demand from China and supply concerns from Australia. As per latest China’s National Bureau of Statistics, their crude steel production rose to 87.66mn mt, up by 8pc in November 2020 compared to prior year.
- India’s primary steel players have been continuously raising domestic steel prices since July. HRC prices have surpassed Rs50,000/mt ex-Mumbai, a 40pc rise during July-December period.
- Poor availability of iron ore this year, particularly in Odisha, due to low production is a major factor. Total Iron ore production in Odisha was 98.2mn mt during Jan-Nov 2020, a drop of 21pc compared to prior year, NMDC recently tweeted, adding that out of the recently auctioned 24 mines, only five have been able to start production and dispatch, leading to shortfall of supply. However, a few steelmakers believe that there will be improvement in iron ore’s availability in the upcoming month.
- Meanwhile, Sponge iron prices also reached an all-time high with Pellet Sponge iron price at Rs25,500/mt ($346.7/mt) ex-Raipur at the moment, a surge of almost 70pc since mid-June.