NMDC to Hike Iron Ore Prices by 6-9% for June

NMDC, the country’s largest iron ore miner, has decided to raise prices of iron ore by 6 to 9% for June this year. The move comes at a time when international iron ore prices have plunged to record lows of $92 per tonne, shocking large steelmakers such as JSW Steel and Essar Steel, with the latter opting for an immediate steel price hike.

The two steelmakers have been hit by the ban on mining in Odisha and largely depend on NMDC for ore supplies. On its part, the country's largest iron ore miner justified the latest price hike citing 'local demand supply situation’.

NMDC’s decision reflects the ground situation in Odisha, where private miners have raised prices following the Supreme Court order on May 16, 2014, which led to a ban on 26 mines, or nearly half of those operating in the state. On Wednesday, NMDC said prices of lump ore would go up by . Rs 300 to Rs 4600 per tonne and that of iron ore fines by Rs 250 to Rs 3160 per tonne for June this year.

“Prices have been revised keeping the local demand-supply situation in mind,” an NMDC official, who did not wish to be named, said.

The company’s decision on a price hike, which came after successive price cuts in earlier months, led one of the country’s largest private steelmakers to announce similar price hikes during the day. “We will have to raise steel prices since we are in no position to absorb the input cost hike,” an Essar Steel spokesperson said.

The other large private player, JSW Steel, said while ore price hike will put furthers pressure on its margins, it would prefer to wait and watch before raising steel prices since domestic demand is yet to pick up and global prices remain stable, a top official said. “We are watching steel imports seriously. They remain a threat,” Seshagiri Rao, joint MD and group CFO, JSW Steel said.

He cited the mining problem in India for the divergent trend in global and Indian ore prices.

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