With commodity prices dropping to their lowest level since the global financial crisis, the department of industrial policy and promotion (DIPP) has suggested that export prices of NMDC Ltd’s iron ore should be fixed to ensure adequate sales realisation. The state-run firm only exports to Japan and South Korea.

If the DIPP suggestions are taken into account, the government’s mineral trading arm MMTC Limited, which also finalises the export rates for NMDC under long-term agreements (LTA), may have to re-negotiate the prices.

“The department is also concerned about the fact that commodity prices are down and India should not end up getting low prices negotiated now for the LTA,” the DIPP said to the commerce ministry on December 15.

The DIPP’s suggestion is likely to get support from the domestic steel industry, which has been clamouring for stoppage of ore exports due to heightened demand in India. Both NMDC and the steel ministry have been traditionally opposed to iron ore exports. Global iron ore prices have dipped to a 5-year low at around $70 a tonne due to dip in demand from China. Tumbling global prices led to the state-run miner lowering the prices of ore lumps by Rs 200 a tonne and Rs 100 per tonne earlier this month.

Source:indianexpress.com