NMDC shares jump over 6% after iron ore prices continued rally for a second straight session

NMDC shares jumped over 6% on Wednesday after iron ore prices continued their rally for a second straight session led by increasing optimism over a potential spike in demand from top consumer China in the coming times.

According to a report, futures of iron ore traded on China’s Dalian Commodity Exchange (DCE) ended daytime trade up 5.63% at 815.5 yuan ($112.73) per metric ton, hitting its highest level since March 25, after a surge of over 3% on Monday.

The benchmark May iron ore on the Singapore Exchange traded 3.54% higher at $107.95 a ton, hitting its highest level since March 26, after jumping more than 6% in the previous session, the report added.

NMDC had reported a drop in iron ore production and sales in the month of March 2024 as compared to March 2023. However, it reported a 10.48% year-over-year (y-o-y) rise in its production for the fiscal year ending March 2024. Similarly, sales increased by 16.37% in the same period.

The country’s largest iron ore producer had reported a 68% jump in its third quarter net profit at ₹1,492 crore. Turnover jumped 45% during the quarter to ₹5,410 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 78% to ₹2,366 crore.

NMDC also declared an interim dividend of ₹5.75 per share, which is 575% of its face value of ₹1 per share.

Amitava Mukherjee, Chairman and Managing Director (Additional Charge) had said steel demand in India is rapidly growing and is expected to continue its upward momentum, directly aligning with the overall GDP growth. “To match the increased demand for steel, NMDC has been ramping up its production capacity and is creating a secure supply channel to meet the domestic demands of the industry,” he had stated.

NMDC stock has risen over 14% since the beginning of the year and has gained over 118% in the last one year.