JSW Steel managed to secure 416,000 tonnes of iron ore from
second round of e-auction conducted on Thursday. However, serious doubts over
the profitability of the company still lingers.
Vinod Nowal, CEO of JSW Steel and president of Bangalore
Chamber of Industry and Commerce, said the company has secured low-grade ore at
a cost of Rs 1,532 to Rs 2,300/MT ex-mine, and the highest grade, with iron
content of 61%, at Rs 2,700 to Rs 3,500/MT with Freight cost being Rs 400-600/MT.
'If the auctions continue as planned, then by the end of
October, we'll be able to run the plant at 100% capacity. At the earlier
auction, the prices were very high, but this time it was reasonably ok. And at
the October 4 and 13 auctions, we expect all the procedural hassles to be
ironed out,” he added
Analysts said the prices paid are a little unrealistic, but
JSW Steel will at least see production figures rising over the next 15-20 days. “I am positive on the company and expect production to ramp up to 70-80% over
the next 15-20 days,” said Bikash Bhalotia, metals analyst with brokerage Pinc
Research.
However, another sector expert from one of the rating
agencies said that “from a short-term perspective, e-auction is good but not
sustainable because of high prices being quoted”.
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