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News: NMDC reported muted volume prints for June 2024. Production volume de-grew by 3% YoY at 3.4 million tons (MT) with cumulative production in FY25 on YTD basis reaching to 9.2 MT (down 14% YoY). Furthermore, sales volume stood at 3.7 MT (down by 9% YoY) and 10.1 MT (down by 9.6% YoY), respectively. Additionally, it has also informed the stock exchanges that it has reduced Iron Ore Lump and Fine prices by ₹500 per tonne to ₹5950 and ₹5110 per tonne, respectively.
Views: This marks a third consecutive month of YoY volume decline for the company. However, the company did witness a month on month (MoM) recovery of 44% and 32% in production and sales volumes in June’24, respectively. The reduction in iron ore prices aligns with the global decline, which saw a drop by ~11% from its peak of ~$110 per tonne reported in May’24. The iron ore price decline at NMDC is more than anticipated and sustenance of the same could adversely impact the profitability of the company going forward.
Impact: Negative