NMDC has increased the price of iron ore supplied from its mines from Wednesday on back of buoyant domestic demand for steel.

The prices of iron ore lumps (65.53 per cent) have been increased eight per cent to ₹4,100 a tonne from ₹3,800 a tonne last fixed on November 17. Similarly, iron ore fines (64 per cent) prices have been revised upwards by 11 per cent to ₹2,910 a tonne from ₹2,610 per tonne, said the company in a statement on Wednesday.

The prices are excluding royalty, DMF, NMET, cess, forest permit fee and other taxes, it added.

Steel prices

The rise in iron prices is expected to squeeze the profit margins of steel companies as the production cost will go up when steel prices are on a downward spiral.

Steel production and consumption in India grew 6 per cent and 11 per cent in the first seven months of this fiscal (April to October). The government recently removed the export duty on steel, but the weak demand in global market will provide little relief for domestic steel producers.