New Delhi: Aiming to increase its flagging sales, sate-owned miner NMDC has reduced prices of higher grade iron ore (lumps) by about 2.5 percent for the current month, according to sources.
This is the fourth reduction since October in iron ore lump prices by NMDC. Its sales had dipped over 27 percent (at Rs 2,047 crore) and profit by over 30 percent (at Rs 1,293 crore) during the October-December quarter.
However, the company has not changed the prices of iron ore fines (lower grade) for March, a source familiar with the development told PTI.
“The company Board, in its meeting yesterday decided to cut the lumps prices by about Rs 100-110 per tonne or 2.5 percent for the current month. It, though, kept the fines prices unchanged. The changes were done to improve the availability of the ore and align the prices with the global levels," he added.
Domestic steel makers are going to be benefited the most with the price reduction for iron ore lumps (having iron content of 62 percent or above).
After the price cut, iron ore lumps would be available in the range of Rs 4,980 per tonne, while the unchanged fines (having iron content of less than 60 percent) are currently at Rs 2,610 per tonne.
Since October, the largest domestic producer of iron ore has either reduced the iron ore prices on a monthly basis or kept them unchanged as demand has been subdued.
Besides, domestic iron and steel industry has also been complaining that NMDC, having over 40 percent share in the domestic iron ore market, is misusing its dominant position.
The slowdown in Indian economy also has its trickledown effect on the market as steel demand has moderated in recent months due to end-use industries such as construction, automobiles and fast moving consumer durables running below their optimum capacities.
In terms of quantity, NMDC's sales of iron ore had declined by 17 percent to 5.3 million tonnes (MT) in the Q3, while the production was down 25 percent at 5.4 MT.
The company has a total production capacity of 32 MT per annum at its mines in Chhattisgarh and Karnataka. For the next fiscal, it has kept a target of spending Rs 4,084 crore on its existing and upcoming plants.