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Business News/ Markets / Stock Markets/  Metal stocks hit as China's iron ore slumps to 3-month low on sluggish demand; NMDC tanks 4%; Vedanta flat
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Metal stocks hit as China's iron ore slumps to 3-month low on sluggish demand; NMDC tanks 4%; Vedanta flat

Shares of mining PSU NMDC - the country's largest producer of iron ore, plunged four per cent today to hit an intra day low of ₹239.45 apiece on the BSE.

The NMDC mines in Donimalai. Photo by Aniruddha Chowdhury/MintPremium
The NMDC mines in Donimalai. Photo by Aniruddha Chowdhury/Mint

Metal stocks including Hindalco, Vedanta, National Mineral Development Corporation (NMDC), Tata Steel traded lower on Tuesday, February 20 after data suggested that iron ore slumped to a three-month low as investors fretted that steel demand wouldn’t stage a strong recovery in China after the Lunar New Year break.

Futures sank more than five per cent in Singapore to hit the lowest intraday price since early November, following a drop in the week’s opening session. The weakness came even after Chinese banks cut a key reference rate for mortgages by a record amount, throwing more weight behind property-sector rescue efforts, according to a report by Bloomberg.

Iron ore falls in China, slips to lowest level in last 3 months

Iron ore is one of the worst-performing major commodities so far in 2024 as investors assess prospects for Chinese demand. The property crisis has been a major drag on the second-largest economy over the past couple of years despite a series of stimulus measures aimed at resolving the issue.

“Headwinds from China’s property sector — 30 per cent to 35 per cent of China’s steel demand and 20 per cent to 25 per cent of China’s total GDP, with related sectors included — will likely persist, albeit at a more moderated pace than last year," said Vivek Dhar, Commonwealth Bank of Australia analyst in a note.

Also Read: NMDC share price jumps over 7% on robust Q3 results; here's what brokerages say

The iron ore market is expected to ‘broadly balanced’ in 2024, BHP Group Ltd. said in a summary as it released earnings. Still, the world’s biggest miner cautioned there were “multiple uncertainties" around that outlook, including over how China’s regulators managed the local steel industry this year.

Metal stocks today

Shares of public-sector undertaking (PSU) NMDC - the country's largest producer of iron ore, plunged four per cent today to hit an intra day low of 239.45 apiece on the BSE. NMDC settled 2.15 per cent lower at 241 apiece on the BSE. NMDC posted a 62 per cent year-on-year rise in its consolidated net profit to 1,469.73 compared to 903.89 crore in the year-ago period.

The state-owned miner has registered a 15 per cent rise in its iron ore production to 12.22 million tonne (MT) in October-December 2023, compared to 10.66 MT in the year-ago period. The sales volumes also rose 19 per cent to 11.39 MT from 9.58 MT in the same quarter a year ago.

Shares of Hindalco declined 1.13 per cent to hit a day's low of 506.75 apiece on the BSE, while metals-to-mining conglomerate Vedanta Ltd settled flat-to-positive at 270.35 apiece on the BSE. Tata Steel also traded flat while shares of Hindustan Copper declined over two per cent to close at 250.10 on BSE.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 20 Feb 2024, 07:43 PM IST
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