NMDC may not hike iron ore prices – Report

May 26, 2008

May 26 (Steel Guru) – FE reported that Indian iron ore major National Mineral Development Corporation Ltd, which was expected to hike the price of iron ore, may not do so immediately as steel manufacturers have assured the government to hold steel prices for two to three months.

The report cited a spokesperson of ASSOCHAM as saying that “It is possible that NMDC may not increase its ore prices immediately.”

There is tremendous pressure on the government to control inflation. Recent increases in the steel prices have been singled out for blame as a major contributor to inflation. Earlier this month, steel producers agreed to a cut in prices by INR 4,000 per tonne on flat products and INR 2,000 per tonne for long products.

Steel Companies have been demanding the government to reduce the prices of domestic iron ore if they have to reduce steel prices to tame inflation. Hence, it cannot expect private players to hold their prices and allow its own enterprise to hike raw material prices. Similarly, the industry is also putting pressure on the government to impose a 15% duty on iron ore exports to discourage export of the raw material.”

NMDC has informed its long term customers that the prices are subject to revision from April 1st 2008 but the quantum will be notified after negotiations with Japanese steel mills.

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