Karnataka iron ore e-auction sales volume decreased by 9% y-o-y in CY’20. The allotted iron ore quantity was 28.34 mn t in CY’20 compared to 31.16 mn tn CY’19, as per data maintained with SteelMint. The sales fell for the year amid lower steel capacity utilization in Mar-Apr’20 due to COVID disruptions. Also MSTC – a leading PSU entity that provides e-commerce related services, 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 & June’20.
JSW Steel’s iron ore sourcing from karnataka e-auctions fell 15% in CY’20: JSW Steel’s iron ore purchases from karnataka e-auctions decreased significantly by 15% to 15.79 mn t in CY’20 compared to 18.65 mn t in CY’19. Out of 15.79 mn t iron ore sourced by JSW in CY20, NMDC supplied 4.96 mn t down by 30% as compared to 7.05 mn t last year (CY’19). It contributed around 31% of total JSW sourcing. Vedanta remained the second largest supplier at 3.88 mn t.JSW iron ore sourcing from other private mines stood at 6.95 mn t.
JSW expects to produce around 7-8 mn t iron ore from nine captive mines in Karnataka in FY’21, which will be used at its Vijayanagar plant.
Operations at NMDC’s Donimalai were put on hold since Nov’18. All supplies made in CY’20 from NMDC to JSW Steel were from NMDC Kumarswamy mines. Karnataka has offered NMDC a four-year lease deed for rights to resume mining of the Donimalai iron ore deposit effective from 3 Nov’18 and conditional to a premium of a provisional 22.5%.
Buyer-wise allotted quantity of CY’20
Qty in t
Source: GOK, DMG, SteelMint Research
NMDC continues to remain the largest iron ore supplier: NMDC was the largest iron ore supplier via Karnataka e-auction and sold 6.78 mn t iron ore in CY’20, down by 20% y-o-y against 8.5 mn t last year. Out of the total quantity sold by NMDC via e-auction, around 73% of the material was purchased by JSW Steel.
Other major suppliers last year were– Vedanta Ltd at 4.85 mn t, Karnataka State Minerals Corporation Ltd. at 3.09 mn t.
Major Highlights of CY’20 Karnataka iron ore e-auctions-:
1. Rashtriya Ispat Nigam Limited (RINL) bought around 72,000 t iron ore from NMDC kumarswamy mines. The iron ore lumps Fe 63% were booked at INR 4,685- 4,695/t and fines Fe 61.5% booked at INR 2,781-2,791/t.
2.Electrotherm India Ltd. – a Gujarat based company procured 92,000 t(80,000 t lumps and 12,000 t fines). The largest supplier in CY’20 was P. Balasubba Setty & Son at around 64,000 t and Vyasankere Iron Ore Mines at 28,000 t. The booking price by the company stood at INR 6,280/t for Fe 64.42% lumps and for fines Fe 62.4% price stood at INR 5,600/t.
3.Similarly, another western India based pellet maker – Jindal SAW procured around 240,000 t iron ore. Out of total 196,000 t fines were from P. Balasubba Setty & Son, 32,000 t from Vyasankere iron ore mines and 12,000 t was from Veerabhadrappa Sangappa & Company.
4.Vedanta Ltd. procured around 433,000 t iron ore from e-auction, out of the total 160,000 t was fines and 273,000 t was iron ore lumps. Major suppliers were P. Balasubba Setty & Son at 120,000 t and NMDC kumarswamy at 112,000 t.
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