The loss that NMDC has suffered due to the price cut, hopes to make up for it with higher sales

The cut in iron ore prices has weighed on investor sentiment in the past few months. Firm announces one-time ore and iron ore fines prices cut for October to October ₹5,950 per tonne and ₹4,760 per tonne respectively. These are 20-25% less than in July.

NMDC’s price cut is in line with the sharp fall in global iron ore prices. Globally, iron ore prices have fallen from a high of $220 a tonne in May to around $120 a tonne. Given that China has cut its steel production to meet decarbonization targets, prices of iron ore, which is a major raw material for steel production, have fallen. Analysts said iron prices have started stabilizing globally. “We like NMDC, expect the correction in iron ore price to be over now. In addition, strong steel demand in the domestic market should help NMDC volume growth,” analysts at Phillip Capital said in a note. For September, its production rose 47% from year one. Its sales increased 29.4% year-on-year (year-on-year).

In the first six months, NDMC’s production and sales grew by 46.6% and 35.5% year-on-year, respectively. The firm is working on increasing the production rapidly. In its annual report, capacity up to 67 MTPA (million tonnes per annum) by 2025 (production of 34.15 MTPA in FY21) through expansion of its screening plant, slurry pipeline, pellet plant and doubling of 150 km Kothavalasa-Kirandul The plan to reach has been highlighted. KK) rail line.

NMDC is expected to report strong performance in Q2. According to analysts at Centrum Stock Broking Ltd., 110% growth in iron ore receipts and 35.3% year-on-year growth will lead to 94% growth in NMDC’s Ebitda.