Commodity Online
NEW DELHI: Domestic steel prices may climb steeply if Steel Ministry agrees to National Mineral Development Corporation’s request to increase iron ore prices by 97 percent.

Country's largest iron ore producer NMDC has sought up to 97 per cent increase in iron ore prices from foreign steel makers. Analysts have said that this could have impact on the domestic market resulting in higher steel prices.

Other than sponge iron makers, steel players like Essar, Ispat and RINL have long-term contracts with NMDC for iron ore supply.

Ahead of an Indian delegation's visit to Japan and Korea to settle long-term contract prices with the steel mills there, NMDC has informed Steel Ministry, seeking nearly 80 per cent increase in prices of iron ore fines and over 96 per cent on lumps from the international clients.

Of its total 30 million tons annual production, NMDC exports around 3.5 million tons to Japanese steel mills and South Korea's steel giant Posco under long-term contracts.

NMDC has clarified that its finalisation of prices between Japanese steel mills and Posco has been guided by global price settlement of iron ore every year.

NMDC plans to go by the recent price-settlement by mining majors Rio Tinto and BHP Billiton with Chinese buyers.

Rio Tinto and Bao Steel had agreed for price increase of 79.88 per cent on iron ore fines and 96.5 per cent on lumps. Subsequently, BHP Billition settled its prices at the same level with Chinese buyers.
Meanwhile, analysts said that price increase for iron ore is only on companies that have contract arrangements with NMDC for supply of iron ore.