MUMBAI National Mineral Development Corp. (NMDC.NS), India's biggest iron ore producer, kept prices unchanged for February, fearing a drop in sales after a robust January, a source said, a move that could impact realisations amid rising overseas prices.
Until 2009, India was the world's third-largest exporter of iron ore, but a government-led clamp down on illegal mining has cut domestic production, forcing steel makers such as JSW Steel (JSTL.NS) and Essar Steel to resort to expensive imports.
The company will charge 5,060 rupees per tonne for lumps, and 2,610 rupees per tonne for fines for February, said a source familiar to the matter. NMDC had slashed prices by up to 6 percent last month.
"Demand had picked up in January, but had NMDC gone ahead with a price increase, the steel mills might have reduced purchases," the source added.
The pricing decision comes despite a 33 percent surge in global iron ore prices since November 31.
NMDC, which produces about 15 percent of the iron ore mined in India, registered a record 3.06 million tonnes of production in January, its highest since inception, with despatches at 2.7 million tonnes, the source said.
"NMDC is trying to rectify the price increases done in October and November," said an analyst with a foreign brokerage in Mumbai.
NMDC benchmarks its prices to weighted average rates for the previous two months offered by a number of local sellers, including Rungta Mines and Essel Mining, based in India's biggest iron ore producing Odisha state.
Benchmark iron ore with 62 percent iron content rose 0.7 percent to $154.20 a tonne, according to data provider Steel Index, the highest price for iron ore since January 14, and just about $4 away from its 2013 peak.
Shares of NMDC (NMDC.NS) were 1 percent lower at 148.70 rupees in a weak Mumbai market.
(Reporting by Siddesh Mayenkar; Editing by Sunil Nair)
Trending On Reuters
HSBC Holdings Plc is shutting its private banking unit in India, marking the exit of another foreign bank from the cut-throat wealth management business in Asia's third-largest economy. Full Article