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NMDC unlikely to reduce ore prices

India's largest iron ore producer NMDC Limited is not in a hurry to reduce domestic ore prices in line with the drop in international prices.

As per report, even though NMDC's in charge CMD Mr NK Nanda was saying that the price drop was being examined, the company's board is unlikely to take a decision in this regard when it meets on Tuesday.

Mr Nanda told Business Standard that the domestic prices of iron ore remained steady despite a decline in international prices.

He attributed this to shortage of ore on account of ban on mining in different states and the imposition of 30% import duty.

NMDC is also getting a higher rate than its bench mark price through E auctions. Mr Nanda said that the price being realised through E auctions was almost 10% more than its bench mark price arrived by taking into consideration the prevailing international and domestic prices for a period of three months.

Given this scenario, NMDC is unlikely to reduce prices. NMDC sources earlier had told Business Standard, that even if there is a drop, it would not be much.

Currently, NMDC is selling lumps at around INR 5,000 and Fe grade ore at INR 3,300 a tonne. On the other hand, the price of lumps in the international market is hovering around INR 7,000 a tonne, about INR 1,500 less than the price prevailed during the second quarter of this financial year.

NMDC accounts for 25% of the total iron ore consumption in the country. In 2010-11, the Navaratna Company had sold 23.75 million tonnes of ore, while the total requirement of domestic industries stood at around 100 million tonnes.