India's top iron ore miner - NMDC - is planning to renew soon a five-year iron ore contract with Japanese customers which expire by the end of March. The company currently supplies to a consortium of Japanese steels companies called Japan Steel Mills and to POSCO in South Korea.
Surprisingly, Japan despite facing power shortages from the earthquake and tsunami that crippled production at several steel mills and other industrial units, did not asked for supplies to be halted from the company.
The company is confident of bagging the order since they feel that the Japanese customers would try to maintain the continuity notwithstanding the fact that the physical lifting will be affected by their economic condition.
NMDC's contract with Japan Steel Mills was on an annual basis for the first four years. The buyers had then agreed to switch to a quarterly price mechanism in line with other firms such as BHP Billiton for the 2010/11 fiscal year.
However, the company’s contract with South Korean importers is also up for review. The company current price agreement for the January-March period with Japanese steelmakers and South Korea's POSCO has been fixed at about $140 per tonne for iron ore fines and about $158 for lump variety on free on board (FOB) basis.
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