India: NMDC hikes iron ore price by INR 200/t in Aug'20

NMDC Ltd, India's largest iron ore producer, has increased prices by 8-9% with effect from today, credible market sources told SteelMint.

Prices of Baila fines and lump have been increased by INR 200/t while the price of DR CLO (calibrated lump ore) has increased by INR 230/t. Baila lump (Fe 65.5%) price has been set at INR 2,650/wet metric tonne (wmt), fines (Fe 64%) at INR 2,360/wmt and DR CLO (Fe 67%) price at INR 3,080/wmt. NMDC sets prices on a free-on-road (FoR) basis and does not include royalty and taxes.

Mining disruption due to monsoon rains and a majority of recently-auctioned mines in Odisha not starting operations yet are supporting iron ore and pellet prices. Demand from steel mills has picked up since June as restrictions on industrial, construction activities, and logistics have been eased, resulting in higher domestic prices of steel products. The buoyant export market for steel is also helping mills raise output closer to capacities.

Odisha iron ore miners have also raised iron ore offers by around INR 500-650/t in Jul'20.

Rising global prices have made imports unviable for most Indian steel producers, further supporting domestic prices. The monthly average price of Fe 62% fines CFR China increased by 4% to $ 107/t in Jul'20 period against an average of $102.92/t in June largely due to tight supply.