Experts cite dwindling steel demand for NMDC's sharp cut in iron ore prices

State-controlled mineral producer NMDC Ltd has cut down iron ore prices by about Rs 500 a tonne for both lumps and fines, effective April 4. Experts say that the move comes in the backdrop of falling steel prices brought on by lower offtake, They believe the price reduction may encourage buyers to pick up larger quantities of the mineral.

The lump ore prices have come down from Rs 3,150 per tonne to Rs 2,650 with the announcement, while fines prices has been reduced from Rs 2,860 per tonne to about Rs 2,360 a tonne. The previous price change was a downward revision of Rs 50 per tonne each in lumps and fines on March 16.

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The reduction is due to weak demand in the country and the decline in steel production and prices. This is also observed as a reaction by Odisha miners, who slashed lump prices. Steel production has declined by 60 per cent, they said. Sources said that the steel prices has come down by 15-20 per cent, to Rs 7,000-8,000 in the past two weeks.

With this, the offtake has also been lower and NMDC's action is expected to encourage buyers to pick up more iron ore in the near future