Stock Advisory Company, Iron ore prices on fire as Odisha miners, NMDC hike prices
In wake of SC order for hefty compensation or closure for earlier illegal production; financial stress rises for steelmakers
The closure of several large iron ore mines in Odisha for non-payment of the penalty imposed for excess mining over the past decade has put ore prices on fire. The uncertainty of availability has encouraged another big supplier, central government-owned NMDC, to raise its prices sharply.
Between October 2017 and the present, merchant miners in Odisha have raised the price of iron ore lump by 49 percent and of fines by 59 percent. In this period, NMDC increased the price by 35 percent for lumps and eight percent for fines. With Odisha and NMDC together accounting for 45 percent of iron ore supply to the domestic steel industry, this has put the latter under stress.
The pace of increase in ore prices within the country is more than double the rate of swing in the commodity in the international sphere, making it clear that the hike is more due to local factors than import demand from China.
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