India: NMDC iron ore fines prices hit over one-year lows

PSU miner NMDC has cut iron ore prices by INR 300-500/tonne (t) for Jan'22 deliveries, SteelMint learnt from sources. Fines prices have witnessed a comparatively sharper correction than lumps. After today's price cut, the miner's fines offer has hit over one year lows.

Factors behind the price drop

• Fines lot remains unsold at NMDC's Chhattisgarh auction: NMDC conducted an auction on 16 Dec'21 for 298,200 t of iron ore from the Kirandul and Bacheli mines in Chhattisgarh. The entire quantity of DR-CLO and Baila lumps was sold, sources told SteelMint. Bids for DRCLO increased by around INR 520/t, while those for Baila lumps remained at the base price. The balance lots for fines and ROM remained unsold.
  
  
• Fall in Odisha iron ore prices: SteelMint's index for Odisha iron ore fines (Fe 62%) has fallen by INR 1,000/tonne (t) between 23 Nov and 22 Dec to INR 4,500/t ex-mines, including royalty, DMF and NMET.
  
  
• Improved domestic iron ore supplies: Old iron ore lessees in Odisha liquidated around 2 mn t of inventory after the high court order. KJS Ahluwalia, which has a large stacking area next to the Nuagaon mine, has been able to remove around 1.3 mn t of iron ore.
  
  
• Recovery in Indian iron ore production volumes: India's iron ore production was recorded at around 19 mn t in October and November, up against 15.5 mn t in Sept'21, after the monsoons receded.
  
  
• Fall in Indian steel prices, especially flats: Indian domestic trade prices of hot-rolled coils (HRCs) slumped to a six-month low on the back of a continual decline in export offers and subdued domestic demand leading to rising inventories in the domestic market. SteelMint's benchmark HRC (IS 2062, 2.5-8mm) prices were assessed at INR 63,500-64,500/tonne (t) (down, INR 1,100/t), while those of CRCs (IS 513 Gr O, 0.9mm) were at INR 68,000-69,000/t (down INR 1,100/t). These price levels were last observed in end-Mar'21. Prices mentioned above are on an exy-Mumbai basis, and exclusive of GST @ 18%.