India: NMDC cuts iron ore prices by upto INR 250/t (3)

• Bids fall in OMC's iron ore auction
  
  
• Global iron ore prices hit a 10-month low
  
  

India's largest merchant iron ore mining company, NMDC, decreased list prices of iron ore fines and calibrated lump ore today by INR 250/t, BigMint learnt from credible sources. The company's effective prices are effective from 21 March 2024.

The miner has fixed prices of DR CLO (10-40mm, Fe67%) at INR 6,970/t and of iron ore fines (-10mm, Fe64%) at INR 5,060/t (on FoR basis from its Bacheli complex). Prices include royalty, DMF and NMET charges.

Factors behind drop in prices:

Bids fall in OMC's iron ore auction - OMC conducted an auction for 1.692 mnt of iron ore fines (Fe 55-64%) on 19 March. Around 1.461 mnt of fines (86%) were booked at INR 3,100-5,000/t.Bids for fines decreased by INR 400-950/t for the majority of the lots against last month's bids, while bids for a few lots dropped over INR 1,050-1,150/t. A sharp drop in pellet export prices along with pellet production cuts in eastern India weighed on bids for fines.

India's domestic pellet index hit seven-month low: The bi-weekly pellets (63%) index dipped 3% to INR 9,540/t (INR 9,840/t) in February and further to INR 9,150/t DAP Raipur in early Mar'24. The price drop was owing to lacklustre sponge iron demand as they are a key raw material for sponge producers along with fall in pellet exports.

Global iron ore prices hit a 10-month low - Iron ore (Fe 62%) fines spot prices dropped sharply by $4/t d-o-d to $100.2/t CFR China on 15 March due to weak buying interest amid poor downstream steel demand. Prices are at a 10 -month low. The market remains worried about weak downstream steel demand, particularly without any support from the government. Notably, China's portside inventories increased to a one-year high of around 141 mnt on 13 March.

Indian iron ore exports fell over 15% in Feb'24 on weak Chinese demand post-Lunar holidays - India's iron ore exports (fines and lumps) witnessed a fall of 16% m-o-m in February to stand at 4.07 mnt as against 4.86 mnt in January, as per data maintained with BigMint. Moreover, exports of iron ore pellets during the month under review were recorded at 1.11 mnt, a m-o-m decrease of 37% compared to 1.77 mnt in January.