India's top iron ore producer, NMDC, is testing a pricing shift aimed at more frequent and market-aligned disclosures.

A source with firsthand knowledge of the situation told Reuters that NMDC, India's largest producer of iron ore, is experimenting with a new pricing strategy for its output to protect its earnings from fluctuations seen in international benchmarks.

At present, state-owned NMDC sets its iron ore prices every month, factoring in local market trends, international pricing, and existing inventory levels. The insider, who asked not to be named since the idea is not yet public, stated that the corporation intends to introduce the new recipe following preliminary testing.

The source revealed that the updated pricing method will avoid linking prices to any international index or exchange. According to the source, NMDC will progressively transition to a more frequent publication of iron ore pricing with the introduction of the new method, although the intervals have not yet been decided.

According to the source, they plan to try to do it more often in the future to ensure that their prices and market developments don't lag. Unlike the existing approach of collecting data directly from mines, the company will gather pricing information from various urban stockyards, the source said.

NMDC serves as the primary iron ore supplier to JSW Steel, India’s biggest steel producer by capacity. A drop in product prices led to a decline in NMDC’s profits for the fourth quarter. The mines ministry believes certain miners attempt to intentionally cut prices to pay lower royalties to the government; therefore, India is also working to revamp the average sale price of iron ore to increase government income.