NMDC for new pricing policy, appoints consultant
State-run NMDC has begun the process to review the pricing policy for iron-ore supply and has appointed a consultant to look into it.
By PTI |
KOLKATA: State-run NMDC has begun the process to review the pricing policy for iron-ore supply and has appointed a consultant to look into it.
"We have appointed a consultant to look into the pricing structure and a report is expected in nine weeks," NMDC chairman and managing director Rana Som said here today.
The new pricing formula is likely to be implemented for the domestic iron-ore supply contracts which will be finalised for 2010-11 by March 31.
The new pricing structure plan is formulated because of sharp price fluctuations of iron ore in recent years. It will attempt to focus more towards domestic market where NMDC is a price setter while it follows international price trends to export iron ore.
However, the policy to derive domestic iron-ore prices is tagged to export prices set for Japanese steel mills, he said. The new policy will bring some changes in this existing policy.
NMDC will try to incorporate certain mechanisms by which the business cycle of the domestic steel industry is captured and make prices more relevant.
"This is high time to look into the issue after such volatility in iron-ore price in the last few years," Som said.
The current pricing policy offeres supply contract for five years, but prices are fixed for one year. Moreover, NMDC fixes price for supply to the Japanese steel mills and take that as an international benchmark price. Based on this price, Indian price is derieved.
Som said price for the domestic steel mills will be finalised by March 2010 for the next fiscal and hoped the new policy will be more favourable to the domestic steel industry than the present system.
On divestment, Som indicated that the company was trying to complete the process by March.
The Centre wants to divest its 8.38 per cent stake in the the country's largest iron ore producer. As of the September quarter, the government held about 98.38 per cent stake in the company.
"We have appointed a consultant to look into the pricing structure and a report is expected in nine weeks," NMDC chairman and managing director Rana Som said here today.
The new pricing formula is likely to be implemented for the domestic iron-ore supply contracts which will be finalised for 2010-11 by March 31.
The new pricing structure plan is formulated because of sharp price fluctuations of iron ore in recent years. It will attempt to focus more towards domestic market where NMDC is a price setter while it follows international price trends to export iron ore.
However, the policy to derive domestic iron-ore prices is tagged to export prices set for Japanese steel mills, he said. The new policy will bring some changes in this existing policy.
NMDC will try to incorporate certain mechanisms by which the business cycle of the domestic steel industry is captured and make prices more relevant.
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"This is high time to look into the issue after such volatility in iron-ore price in the last few years," Som said.
The current pricing policy offeres supply contract for five years, but prices are fixed for one year. Moreover, NMDC fixes price for supply to the Japanese steel mills and take that as an international benchmark price. Based on this price, Indian price is derieved.
Som said price for the domestic steel mills will be finalised by March 2010 for the next fiscal and hoped the new policy will be more favourable to the domestic steel industry than the present system.
On divestment, Som indicated that the company was trying to complete the process by March.
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The Centre wants to divest its 8.38 per cent stake in the the country's largest iron ore producer. As of the September quarter, the government held about 98.38 per cent stake in the company.
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