New Delhi July 23: Country's largest iron ore producer NMDC is seeking up to 97 per cent increase in iron ore prices from foreign steel makers, a move that could have similar repercussions on the domestic market, which may result in higher steel prices.

Other than sponge iron makers, steel players like Essar, Ispat and RINL have long-term contracts with NMDC for iron ore supply.

Ahead of an Indian delegation's visit to Japan and Korea to settle long-term contract prices with the steel mills there, NMDC has informed Steel Ministry, seeking nearly 80 per cent increase in prices of iron ore fines and over 96 per cent on lumps from the international clients.

This is significant for steel industry here, as domestic iron ore prices are determined on the basis of the percentage increase accepted by Japanese steel mills for NMDC's products duly adjusted to rupee-dollar parity.

"If iron ore prices shoot up by 100 per cent, it will substantially add to our input costs, which may ultimately have a reflection on steel prices," an industry official said.

Of its total 30 million tonnes annual production, NMDC exports around 3.5 million tonnes to Japanese steel mills and South Korea's steel giant Posco under long-term contracts.

In a letter to Steel Ministry, NMDC said its finalisation of prices between Japanese steel mills and Posco has been guided by global price settlement of iron ore every year.

NMDC plans to go by the recent price-settlement by mining majors Rio Tinto and BHP Billiton with Chinese buyers.

Rio Tinto and Bao Steel had on June 25 agreed for price increase of 79.88 per cent on iron ore fines and 96.5 per cent on lumps.

Subsequently, BHP Billition settled its prices at the same level with Chinese buyers on July 4.