State-run miner National Mineral Development Corporation (NMDC) today reduced the price of iron ore lumps by 5.9 per cent or Rs 320 a tonne for the current month mainly to align rates with the landed cost of the imported raw material.
At a Board meeting here, NMDC, however, decided to keep the price of fines, which have less iron content, unchanged at Rs 2,610 per tonne.
"Iron ore fine prices have been kept unchanged for the month of January but lump prices have been cut by 5.9 per cent (Rs 320 per tonne)," a source present in the meeting told PTI.
Before the correction, the average price for NMDC's iron ore lumps, having 65 per cent iron content were, hovering at around Rs 5,400 per tonne.
"The price correction for iron ore lumps was needed since the landed cost of imported material is cheaper vis-a-vis the current price of NMDC," an industry source said.
However, he said the company should have brought down the price of fines as well as they are available at a cheaper rate even domestically.
Iron ore lumps and fines are two main variants of the raw material for steel-making, but most of the Indian steel makers use lumps for their operations in the absence of the necessary technology to use fined for iron making.
NMDC's move to reduce the lump ore price, may not act as a catalyst though for domestic steel makers to effect a price cut at the moment when the demand is moving northwards.
NMDC chairman C S Verma had earlier said the company will take stock of demand-supply situation, international prices of the raw material and prevailing domestic prices before taking any call on the prices.
NMDC had raised the price of iron ore by 8-13 per cent for the July-September quarter when international prices were low. From this quarter, NMDC decided to revise prices of iron ore on a monthly basis.
In October, it had reduced prices by 2-11 per cent and again by 3-11 per cent in November; but did not tweak prices in December, primarily to pacify steel makers which accused the state-owned firm of selling at a higher cost domestically and exporting cheaper.