Karnataka has registered a fall of 15% in e-auction sales volume in the quarter ended Jun’20. Total iron ore allotted quantity in the first quarter (Apr-Jun) was recorded at 5.48 mn t compared to 6.46 mn t in the last quarter (Jan-Mar’20). On yearly basis, it fell by 29% against Q1 FY20.
Due to the lockdown imposed nationwide amid coronavirus pandemic in the month of Apr’20, almost all the southern India (Karnataka) based major steel makers kept their operations suspended. Also, MSTC – a leading PSU (Public sector undertaking) entity that provides e-commerce related services across diversified industry segments offering e-auction/e-sale and e-procurement services also postponed its services till the first week of Apr’20. These resulted in a plunge in sales in Apr’20, which gradually picked up in May & Jun’20.
JSW Steel’s iron sourcing from Karnataka e-auctions down by 11% in Q1 FY21-: India’s major private steel mill and also the largest buyer of Karnataka iron ore decreased its iron ore purchases in the first quarter of FY21. During the first quarter, JSW purchased around 3.44 mn t iron ore from Karnataka e-auctions against 3.87 mn t in last quarter (Jan-Mar 2020).
Out of 3.44 mn t iron ore sourced by JSW, NMDC supplied 1.63 mn t down by 75% against 0.93 mnt in the last quarter (Jan- Mar 2020) and thus contributed around 47% of total JSW sourcing.
Vedanta mines remained second-largest iron ore supplier to JSW Steel at 0.45 mn t in Q1 FY21, recording a decline of 13% on q-o-q basis. Other suppliers were SMIORE supplied 0.35 mn t, Ramanadurga iron ore mine 0.29 mn t, and others 0.73 mn t.
Sales from NMDC increased sharply by 57% q-o-q -: NMDC sold 1.95 mn t iron ore via Karnataka e-auctions in Q1 FY21 and sales significantly increased by 52% q-o-q against last quarter at 1.24 mn t (excluding nos. of Donimalai production).
Ramanadurga iron ore mine stood second-largest supplier via Karnataka e-auctions at 0.61 mn t, followed by Vedanta at 0.59 mn t in Q1 FY21 against the last quarter at 1.3 mn t.
National Mineral Development Corporation (NMDC) had cut Karnataka e-auction floor prices for April and May 2020 in total around INR 700-800/t for both lumps and fines. However, the company has increased its base price around INR 200/t in both lumps and fines for Jul’20.
Buyer-wise allotted quantity of Q1 FY21 iron ore e-auctions
Qty in t
Source: GOK, DMG, SteelMint Research
Major highlights of Q1 FY21 Karnataka iron ore e-auctions-:
1. Electrotherm India Ltd – a Gujarat based company bought only 12,000 t iron ore lumps (Fe 62.19 – 63.67%) from P.Balasubba Setty & Son at INR 3,400-3,510/t in the last quarter.
2. Vedanta procured 36,000 t iron ore out of which 28,000 t was lumps (Fe 61%-65.25%) at INR 2,945-3,380/t and rest 8,000 t was fines (Fe 62.19%) from P. Balasubba Setty & Son mines at INR 2,200/t.
3. Western India based pellet maker – Jindal SAW bought 20,000 t iron ore from Karnataka e-auction. Entire quantity was fines (Fe 61.44-62.36% grade) from P.Balasubba Setty mines at INR 2,100-2,410/t.
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