NMDC - Falls Short On Annual Volume Guidance: Systematix

Systematix Research Report

NMDC Ltd. reported provisional volume numbers for March with production and sales of 4.9 million tonne (-13% YoY/+24% month-on-month) and 4 million tonne (-18% YoY/-1% MoM), respectively.

Production for the quarter comes to 13.3 mt (-6%/+9% YoY/QoQ). Iron ore sales volumes for the quarter came in at 12.5 mt (+0.8% YoY, -9.8% QoQ).

Operational performance was impacted by lower production and offtake at its mines in Karnataka. Full-year production and dispatch of 45.1 mt and 44.8 mt, respectively, fell short of the guided range of 47-49 mt.

International iron ore prices have fallen by over 25% since the beginning of the year due to the pile-up of iron ore inventories at ports in China.

NMDC, which had consistently increased prices since September 2023, took a ~Rs 200/tonne price cut during March 2024.

We expect further price cuts in the short term to reflect the movement in international prices before seeing price recovery as Chinese port inventories de-stock.

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