The
first e-auction of iron ore in Karnataka benefited major steel players in the
state like JSW, Tata Metaliks & Mukand Ltd. However, smaller players mostly
the sponge iron makers continue to face the supply crunch due to the following
reasons:
*
Larger chunk bought by bigger companies–
Out of the 4 lakh MT of iron ore sold in the e-auctions, 1.17 lakh was bought
by JSW Steel which has a daily requirement of 50,000 MT of iron ore. Other
major companies like Tata Metaliks & Mukand Ltd also bought major chunks
from the auctions leaving a meager part for the small & medium scale
manufacturers.
*
Price in auction remains high– The
price at which the iron ore was sold amounted 25%-30% more than the base price
set by MSTC. So, smaller companies found it difficult to procure iron ore at
the escalated price as they are already struggling with the issues like rise in
input cost and squeeze in profit margins
RK Goyal, managing director of Kalyani Steel says that
the overall quantity itself was far too less to match demand and the ore was
auctioned off at higher price.
Kalyani Steel managed to get about 20,000-24,000 tonne of
iron-ore i.e. barely 30% of their
monthly requirement at 30-50% higher price from the time before the mining ban
in Karnataka.
“However, this will help restart at least one of the
blast furnaces from the three of the plant that had been temporarily shut down.
This will only help to meet the immediate requirements of our clients,” he
added.
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