India: NMDC Hikes Iron Ore Price Upto 22% for Jan Deliveries

India's largest iron ore producer - National Mineral Development Corporation (NMDC, Chhattisgarh) has increased iron ore prices up to 22% for Jan'18 deliveries. The miner has raised lump prices by INR 500/MT, fines by INR 500/MT, DR-CLO by INR 580/MT and ROM by INR 460/MT.

Last month the miner had hiked iron ore prices by 13%.

Factors resulting in hike in iron ore prices

1. Few major Odisha iron ore mines ordered to shut down operations: Five working iron ore mines in Odisha have gone out of operations as they failed to shell out the penalties mandated by the Supreme Court. The apex court had directed payment of compensation for overproduction by 31 Dec'17.The mines being shut down are the ones held by Mesco Steel, Serajuddin & Company, government owned IDCOL and National Enterprises. Closure of these mines means a deficit of 20 MnT in annual mining capacity.

2. Price hike by Odisha iron ore miners - Odisha based major merchant miners namely - Rungta Mines, KJS Ahluwalia and Kaypee Enterprises have raised lump prices by INR 500/MT and fines prices by INR 300/MT w.e.f today. Prior to this they increased prices twice in Dec'17.

3. Sharp increase in sponge iron prices - Indian sponge iron prices increased sharply by about INR 2000/MT M-o-M. P-DRI prices in Raipur have increased to INR 21,200/MT (ex-works)

4. Imported scrap prices continue to rise on strong global prices. Shredded scrap offers last week were assessed at USD 375/MT CFR India levels.

5. NMDC's (Chhattisgarh) Dec'17 auction fetched a premium of about INR 760/MT on DR-CLO

6. Hike in finished steel prices - Major Indian steel mills are likely to raise flat and long steel prices sharply for Jan'18. Prices are expected to go up by around INR 2000/MT.

NMDC (C.G.) iron ore prices

F.O.R prices in INR/MT w.e.f 02 Jan'18
Royalty, DMF, NMET and other taxes extra
Source: SteelMint Research