Iron ore major National Mineral Development Corporation (NMDC) looks like an interesting prospect. The public sector undertaking (PSU) has spun off its steel plant as a listed concern, NMDC Steel. It has hiked ore prices four times since November 2022, after removal of export duty, in response to strong trends. Overall, this is a 42 per cent hike in ore prices (averaged across fines and lumps) since November 2022, suggesting margin expansion and earnings upgrades in the fourth quarter of the 2022-23 (Q4FY23).
The hikes have been prompted by stronger seaborne ore prices and removal of export duty. China reopening and cutting its own carbon-intensive steel production has created export demand. NMDC’s prices are still at a considerable discount (30 per cent) to imports so there’s a margin of safety for the domestic business.
Volumes, though, are down and the share price hasn’t responded. In the 11-month period of FY23, sales volu
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