Singapore (Platts)--9Nov2012/635 am EST/1135 GMT
In a move that Indian steelmakers are like to welcome, state-owned miner NMDC has dropped its domestic iron ore contract prices for November, a source close to the issue said Friday. For supplies of 6-30 mm blast furnace-grade lumps of 65.5% Fe, NMDC has priced its contract at Rupees 5,400/mt ($99.40/mt) for November, down 11% from Rupees 6,070/mt in October. The miner is also offering 64%-Fe fines at Rupees 2,600/mt, down 3% from its October contract price of Rupees 2,690/mt, the source said. All prices are on a free-on-rail basis. The new prices were decided at a board meeting held on Thursday, the source said. NMDC derives its contract prices according to a formula that is partly based on international spot price movements with a time lag of a month or two, he added. NMDC got a lot flak from steelmakers after it hiked its contract prices for the July-September quarter when international spot prices were already falling. The miner subsequently cut prices and also switched to a monthly pricing system in October. In Karnataka, where all iron ore produced is sold through electronic auctions, about 1.024 million mt of NMDC's ore stocks are being put up for auction on Friday. In its previous auction on October 31, most of the ore fines offered by NMDC were sold. But buying interest was lackluster for ore lumps, Karnataka state government data showed. Sources attributed this to lump ore stocks being priced too high. For instance, about 52,000 mt of 59.3-60.5%-Fe ore fines from NMDC's Donimalai mine were auctioned in separate lots with booking prices in the range of Rupees 3,308-3,380/mt. The floor price for these stocks ranged from Rupees 2,110/mt to Rupees 2,258/mt. In the case of ore lumps from Donimalai, about 60,000 mt of 62-62.8%-Fe stocks were on offer with floor prices in the range of Rupees 5,215-5,339/mt. Only about 24,000 mt of these stocks were auctioned with booking prices mostly in the same range as floor prices.--Anitha Krishnan, anitha_krishnan@platts.com --Edited by E Shailaja Nair, shailaja_nair@platts.com