NMDC shifts toward Platts-like index to streamline pricing

To respond better to price volatility and streamline its growing portfolio of blended and stockyard-based products, state miner NMDC Ltd, formerly National Mineral Development Corp (NMDC), is moving towards an index-based pricing model, managing director Amitava Mukherjee said in a post-earnings call to analysts.

The system, still in early stages, will rely on an internal, automated pricing engine, similar to global commodity benchmarks such as the Platts Index.

The Platts Index, published by S&P Global Commodity Insights, does not rely on external global benchmarks to determine its index prices. It creates the benchmark through its market-on-close (MOC) price assessment process.

For NMDC, the formula to determine prices will remain confidential, Mukherjee said. "The idea is to have more predictive pricing and more frequent pricing, so that the market dynamics are factored into pricing on a regular basis rather than… with a great amount of time lag," he said.