State-run iron ore miner NMDC is likely to clock its lowest average realisation this fiscal, in four years, due to subdued price of the key steel-making input.
NMDC's average realisation in the first three quarters of the current fiscal stood at Rs 3,823 per tonne against Rs 4,019 per tonne in the entire last fiscal, company documents showed. In the previous two fiscals, the average realization was even better. It was Rs 4,091 per tonne in 2011-12 and Rs 4,289 a tonne in 2010-11.
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"The average realisation is definitely not going to be more than what the company had clocked during the entire last fiscal. It is, as such, would be the lowest in four years this fiscal," a steel ministry official said.
The dip in realisation is the result of subdued price of both fines and lump varieties of the raw material. NMDC had raised the price for the first time in current fiscal in October 2013 by Rs 100 per tonne. In December 2013, it also raised the price by Rs 200 per tonne for both lump and fines. The company had hiked fines' price by Rs 100 a tonne in the beginning of the current month.
The results were visible. The average realisation of the company came down to Rs 3,907 a tonne in the first quarter. It dipped further to Rs 3,760 a tonne in the second quarter. However, it inched up to Rs 3,795 a tonne in the third quarter. The subdued iron ore demand is due to poor consumption of steel in the country. During April-December period, India's steel consumption grew just 0.5 percent, according to Joint Plant Committee, a unit of the Steel Ministry.
NMDC's production during April-January period rose to 23.23 million tonne (MT), just 2.52 MT more than in the same period last fiscal. Sales also went up to 24.28 MT, 3.25 MT more than the year-ago period. The company hopes to clock its highest-ever production and sales to over 30 MT in the current financial year.
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