India’s largest iron ore producer NMDC Ltd today said that there would not be much fluctuation in domestic prices even after a slump in international rates.
“Prices will remain stable here. There could be slight up and down, but it will remain largely stable. My hunch is that domestic iron ore prices will remain same at current level,” NMDC Chairman Narendra Kothari told PTI in an interview.
International iron ore prices have declined almost 25 per cent so far in 2014 to just above $100 a tonne, the lowest level since September 2012, on increased supply and subdued steel demand.
The Australian Treasury earlier in the day reportedly said that iron ore prices could fall continuously until June 2016 to below $83 a tonne. Australia is the world’s third-largest exporter of iron ore.
Kothari, who took over as Chairman and Managing Director of NMDC on April 21, is unperturbed about the declining trend, saying, “Our prices are almost half of the international prices. So I don’t find any effect on this. Our prices should remain same.”
After keeping prices unchanged for two months, state-run NMDC slashed the prices of iron ore lumps, considered high grade due to its rich iron content, by Rs 200 per tonne in May and kept the prices of iron ore fines, considered low grade, at the previous month’s level.
Following this, lump ore prices increased to Rs 4,300 per tonne, while that of fines was at Rs 2,910 a tonne. NMDC decides product prices on a monthly basis.
Kothari said that the company’s margins would remain “more or less same” during the current financial year, in which sales could touch 31 mt and production 32 mt. The targeted turnover is about Rs 12,000 crore, while profit could be more than Rs 6,000 crore.
Buoyed by a rise in demand from domestic steel makers, NMDC’s sales and production touched a record of over 30 million tonnes in 2013-4. The company’s current iron ore production capacity is 32 mt.
NMDC is scheduled to announce its fourth quarter results on May 30.