September 08, 2008

Iron ore prices are determined by market – Sesa Goa

Mr PK Mukherjee MD of Sesa Goa said that iron ore producers do not determine the price, since it is the market which does it. He added that the spot market is holding very stable for last 3 to 4 months though there are some signs of slowing down.

Mr Mukherjee, while giving an interview with CNBC TV18, said that "We sell in the domestic market based on who can offer us the higher price, which materials can be consumed in the domestic market. International price means that it has to go to a port and in case of Indian market, it is ex mines. So in case of going to the port, there are lot of hurdles including getting the railways and putting the material on to the port. So the cost is also huge, which is not comparable."

He added that "Sesa Goa does not announce such prices, NMDC announces the prices, they must be having the contracts accordingly but we do not have such contracts so we do not announce the price. Whenever materials are available, we go to the market, ask for the price and whatever market price is determined, we sell. There are cases when we are announced for the availability of the material in the newspaper for 5 years, for domestic users and there was not a single bidder."