NMDC, which decides its monthly iron ore prices on the basis of domestic demand and supply position, reduced the same for lumps by about 2.2 per cent for March.
The firm trimmed the price of ore lump by Rs 110 a tonne, with the new price being Rs 4,950 a tonne. The reduction in the price of lumps may provide some relief to domestic steel makers, who had been complaining that soaring iron ore and coal prices have been putting a squeeze on their margins.
But the firm kept the price of fines unchanged. The iron ore miner has been either reducing prices or keeping them unchanged For the last few months, despite a sharp rise in the global prices of the raw material during November to December last year.
In October, the firm reduced the prices by 2-11 per cent and in November, the price was further cut 3-11 per cent. In December, it had kept them unchanged. Again in January this year, it cut prices of lumps by 5.90 per cent (Rs 320 a tonne), while not changing the price of iron ore fines.
In 2012-13, the iron ore miner may produce 26 million tonne of ore against 27 million tonne last fiscal.
It is expected to switch to a new pricing mechanism in the next few months, with consultancy firm KPMG having recently submitted its report on different pricing models prevailing in other iron ore mining countries.