State-run iron ore miner NMDC, which has refrained from a price rise of the vital input for steel industry for the current month, came under pressure on Wednesday to cut rates with an industry association alleging that it is charging 25% more than the miners in Odisha.
The country’s leading iron ore producer had slashed the prices in the previous two consecutive months.
“National Mineral Development Corporation (NMDC) is charging 25% higher charges as compared to other iron ore miners based in Odisha which is adversely impacting domestic steel industry,” Assocham sceretray general DS Rawat worte in a letter to steel and mines minister Narendra Singh Tomar.
Though NMDC chairman and managing director Narendra Kothari declined to comment, a senior government official said NMDC has to reduce prices “drastically” since its sales have come down significantly and ore available in Odihsa is much cheaper.
“Suppliers from Odisha are offering 63% Fe iron ore fines at R2,150 per tonne in comparison to R2,340 (together with R351 for royalty) charged by NMDC which is higher by about R500-600 per tonne,” Assocham wrote.
Higher prices and subdued demand have impacted NMDC’s production and sales in 2014-15 fiscal. Both of then have remained nearly flat compared to a year ago period to stand at around 31 MT and 30.5 MT respectively. NMDC is yet to make the numbers public.
The industry association said that the prices are required to be brought down to help domestic steel industry become competitive as other Asian economies like China, Japan and Korea are exporting steel at throw-away prices creating a huge problem for the Indian steel industry and posing a threat for their survival and sustainability.
NMDC revises its prices every month depending upon the prevailing demand-supply scenario in a particular month. The largest iron ore miner in the country had in February and March pruned prices by about 950 per tonne for lumps that has higher iron content to R3,250 per tonne and by R600 a tonne for fines or inferior quality to R2,460 a tonne during the same period. It did not change the prices in April.
Domestic iron ore prices are under tremendous pressure as internationally, the costs of the raw material have come down recently to its decade-low at $47 per tonne due to higher supply and subdued demand from China, the largest consumer of iron ore and producer of steel. Bankers are predicting further drop in the prices of iron ore.
Source: Financial Express
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