NMDC plunges 4% amid fall in iron ore prices in China

15 Feb 2022 , 12:48 PM

NMDC Limited shed over 4% after iron ore futures plunged on Tuesday, extending Monday’s sharp losses. As per media reports said that futures of iron ore traded in China crashed 12% earlier in the day.

At around 12.50 PM, NMDC Ltd was trading at Rs146.55 per piece down by Rs6.55 or 4.28% from its previous closing of Rs153.10 per piece on the BSE. The scrip opened at Rs153.20 and has touched a high and low of Rs153.35 and Rs144.05 respectively.

The iron ore prices plunged amid fears of a China clampdown as Beijing warned it would act against what it called the spread of misinformation on prices.

Chinese iron ore prices had surged in recent sessions to a five-month high on the back of optimism that the accommodative monetary policy of the People’s Bank of China will boost growth, the media reports added.

However, Dalian Commodity Exchange on Monday hiked transaction fees to curb speculative bets on iron ore futures.

Further, media reports pointed to National Development and Reforms Commission conducting inspections at ports and commodity exchanges to look into iron ore inventories and trading in spot and futures markets.

The decline in Chinese prices of iron ore is a negative for domestic iron ore producers like NMDC, whose own prices are largely influenced by global prices of the metal.

NMDC last week reported a marginal 2.8% drop in consolidated profit at Rs2,048.40 crore for the quarter ended December 31, 2021 on the back of higher expenses. The company shared transcript of earnings call on Monday.