India: NMDC slashes iron ore prices by over INR 1,000/t ($14/t) for Sept'21

India's largest government-owned merchant iron ore miner, NMDC, has cut iron ore prices for Sept'21 deliveries by INR 1,000-1,160/t ($14-16/t), SteelMint learnt from credible sources.

The revised offers by NMDC are as follows:

• Baila lump (6-40mm, Fe 65.5%) - INR 6,150/t (down by INR 1,000/t m-o-m).
  
  
• Baila fines (Fe 64%) - INR 5,160/t (down by INR 1,000/t m-o-m).
  
  
• DR CLO (10-40mm, Fe 67%) - INR 7,140/t (down by INR 1,160/t m-o-m).
  The above FoR prices are on per tonne basis, excluding royalty and other statutory taxes.
  
  

Factors behind decline in offers

• Iron ore prices in Odisha drop - SteelMint's weekly Odisha iron ore fines Fe 62% index closed at INR 6,900/t, ex-mines, including Royalty, DMF & NMET on 28 Aug'21, falling by INR 1,800/t m-o-m. OMC had scheduled an auction for iron ore lumps and fines on 31 Aug'21. The auction received dull participation with lots fetching bids close to the base price. The auction fetched bids for only 238,000 tonnes (t) of iron ore lumps out of the total quantity of 765,000 t and for 20,000 t of iron ore fines out of 902,000 t put up for auction.
  
  
• Global iron ore price drop - Chinese spot iron ore fines Fe 62% index closed at $140/t, CFR China yesterday, falling by $30 m-o-m. Tougher steel production curbs in China have dampened iron ore demand outlook for the near-term.
  
  
• Domestic pellet prices plunge to six-months low on falling export realisations - SteelMint's bi-weekly iron ore pellet (Fe 63%) index for the key central Indian market of Raipur, is currently trading at INR 11,800/t DAP Raipur on 3 Sept, lower by INR 2,500-3,000/t m-o-m. Iron ore sourcing by Chhattisgarh-based sponge iron units inched down as preference tilted towards pellets. PELLEX recorded total traded quantity at 125,000 t in Aug'21 compared to about 71,000 t in the preceding month, a rise of over 76% m-o-m.SteelMint's pellet export index (Fe 64%, 3% Al, FoB east coast) declined $45-50/t, m-o-m, and currently stands at $136/t. The index has fallen to a level which is the lowest in over nine months, as per SteelMint data. These levels were last witnessed towards end-Nov'20. The Indian pellet export market remained dull for the weak on low China demand on announced steel production cuts.
  
  
• Sponge iron producers in Chhattisgarh reduced NMDC iron ore sourcing in Aug'21 - Chhattisgarh-based sponge iron plants and secondary steel producers decreased iron ore sourcing from India's leading merchant iron ore producer, National Mineral Development Corporation (NMDC), in Aug'21 compared to Jul, as per SteelMint data. NMDC's iron ore rake movements to Chhattisgarh-based units were recorded at 41 in Aug compared to 66 a month ago - a decrease of 36%, m-o-m. NMDC recorded total rake movements from its Bailadila mines in Chhattisgarh at 346 in Aug against 339 in Jul.
  
  
• NMDC's iron ore auction from Chhattisgarh receives subdued response - NMDC conducted an auction on 26 Aug'21 for 147,000 t of iron ore from the company's Kirandul and Bacheli mines in Chhattisgarh. The auction received dull response with the fines lots remaining unsold and the lump ore fetching bids close to the base price.