Aiming to increase its flagging sales, state-owned miner NMDC has reduced prices of higher grade iron ore (lumps) by about 2.5 per cent for the current month.

This is the fourth reduction since October in iron ore lump prices by NMDC. Its sales had dipped over 27 per cent (at Rs 2,047 crore) and profit by over 30 per cent (at Rs 1,293 crore) during the October-December quarter.

Domestic steel makers are going to be benefited the most with the price reduction for iron ore lumps (having iron content of 62 per cent or above).

After the price cut, iron ore lumps would be available in the range of Rs 4,980 per tonne, while the unchanged fines (having iron content of less than 60 per cent) are currently at Rs 2,610 per tonne.

Since October, the largest domestic producer of iron ore has either reduced the iron ore prices on a monthly basis or kept them unchanged as demand has been subdued.

Besides, domestic iron and steel industry has also been complaining that NMDC, having over 40 per cent share in the domestic iron ore market, is misusing its dominant position.

The slowdown in Indian economy also has its trickle down effect on the market as steel demand has moderated in recent months due to end-use industries such as construction, automobiles and fast moving consumer durables running below their optimum capacities.

In terms of quantity, NMDC’s sales of iron ore had declined by 17 per cent to 5.3 million tonnes (MT) in the Q3, while the production was down 25 per cent at 5.4 MT.

The company has a total production capacity of 32 MT per annum at its mines in Chhattisgarh and Karnataka. For the next fiscal, it has kept a target of spending Rs 4,084 crore on its existing and upcoming plants.