India: NMDC cuts iron ore fines price by INR 400/t for Oct

PSU miner NMDC has cut iron ore prices by INR 200-400/tonne (t) ($3-5/t) for Oct'21 sales, SteelMint learnt from sources. The price cut in fines is higher than that of lumps which may be due to curtailed pellet production for the better part of Sept'21 owing to falling export realisations pressurising domestic offers. The revised offers are as follows:

• Baila lumps (6-40mm, Fe 65.5%) - INR 5,950/t (down INR 200/t, m-o-m).
  
  
• Baila fines (Fe 64%) - INR 4,760/t (down INR 400/t, m-o-m).
  
  
• DR CLO (10-40mm, Fe 67%) - INR 6,910/t (down INR 230/t m-o-m).
  
  
• Prices are on FOR basis, excluding royalty and other statutory taxes.
  
  

Why have the prices declined?

• Fall in sales on m-o-m basis: NMDC recorded a 6% decrease in its total iron ore sales in the month under review to 2.73 mn t as against 2.91 mn t in August. Total sales from the Chhattisgarh mines stood at 1.87 mn t and the remaining 0.86 mn t were from its Karnataka mines.
  
  
• NMDC auctions receive tepid response: NMDC had scheduled two iron ore auctions from its Chhattisgarh mines on 24 Sept'21. According to market sources, the auctions received subdued response, with the iron ore fines lot fetching no participation and the lumps and DR-CLO lots fetching a marginal premium of INR 100/t over the set base price, as per SteelMint reports.
  
  
• Drop in NMDC Chhattisgarh rake movements: NMDC's iron ore rake movements from Chhattisgarh were at 261 in Sept'21, down 25% against 346 in Aug'21, according to data maintained with SteelMint.
  
  

Rastriya Ispat Nigam Limited (RINL) remained the largest buyer of NMDC's iron ore from Chhattisgarh in September. RINL's iron ore sourcing decreased by 23% to 151 rakes in September as against 197 in August.

NMDC's iron ore rake movements to Chhattisgarh-based units were recorded at 36 in September compared to 41 a month ago.

• Global iron ore price drop: The Chinese spot iron ore fines Fe 62% index closed at $117.8/t, CFR China yesterday, against last month's average of $121/t, CNF China. Chinese production cuts have dampened buying interest.