NMDC slumps into red

NMDC is down in the red; it did not exactly crash but is meandering in the red – opening slightly lower at Rs.124, it went down to Rs.123; it closed yesterday at Rs.124.65. Its not too far from its 52-week low of Rs.119.25.

The largest iron ore producer of India, the main raw material used for making steel, NMDC yesterday announced a sharp reduction is the prices of lump ore and fines.

It reduced price of lump ore (high-grade iron ore) by Rs.1,100/tonne to Rs.4,400/tonne and that of Fines (inferior grade iron ore) by Rs.1000 to Rs.3,310/tonne.

These prices exclude royalty, DMF, NMET, Cess, Forest Permit Fee, and other taxes.

The prices have gone effective from June 5, 2022.

Also the commisioning of NMDC’s 3-million tonne per annum integrated steel plant at Nagarnar getting delayed is playing on the markets too. The burning of a motor, which has in turn stalled commissioning of the oxygen plant. The plant is expected to start by July-August.

The sale of the Nagarnar Steel Plant (NSP), a three million tonne integrated plant set up by the National Minerals Development Corporation (NMDC) Ltd, is also awaiting the completion of the demerger process. In October 2016, the Cabinet Committee on Economic Affairs (CCEA) had decided to disinvest the NSP as a unit of the NMDC, but amended the decision in October 2020 with a view to carve out the NSP as a separate company from the NMDC and sell the new firm to a strategic buyer. At the time, the sale was expected to be completed by September 2021.  The demerger of the steel plant from parent NMDC is about to be completed soon, in the next 5-6 months.