NMDC iron ore price hike jitters market sentiment

Exclusive

10 October 2016

In line with our exclusive research news published last week, NMDC hiked iron ore lumps and fines prices by over 20% for October 2016. The hike has set stage for private miners of the country like Rungta, Serajuddin etc to follow the trend and join the band wagon. Steel and Sponge iron producers have raised concerns with this unprecedented rise.

NMDC while announcing its October prices raised lump ore prices by 23.53% to Rs 2,100 per wet metric tonne (WMT) compared with Rs 1,700 per WMT in September 2016. Price of fines were raised by 20.55% to Rs 1,760 per WMT in October 2016 compared with Rs 1,460 per WMT in September 2016.

Failing to see any fundamental basis for this price hike by NMDC, domestic iron ore and steel producers are unhappy with the state and private miners.

Indian Steel producers are unable to set direction to their steel prices in this month as steel demand is holding weak and coking coal prices recently surged sky high. Iron ore price hike has additionally spoiled the sentiment and it may now force the steel producers to increase steel prices.

Global iron ore prices are holding near $54 per tonne (Rs 3600-3770 per ton) and are expected to be under pressure in the coming months.