Karnataka iron ore e-auction sales volume decreased by 40% in Jan’21. The allotted iron ore quantity was 2.2 mn t in Jan’21 compared to 3.64 mn t Dec’20, as per data maintained with SteelMint. The fall is attributed to lower purchases by JSW due to increased dependence on captive mines.
JSW Steel’s iron ore sourcing from Karnataka e-auctions fell 15% in Jan’21:
JSW Steel’s iron ore purchases from Karnataka e-auctions decreased significantly by 36% to 1.18 mn t in Jan’21 compared to 1.84 mn t in Dec’20. Out of 1.18 mn t iron ore sourced by JSW in Jan’21, NMDC supplied 0.45 mn t down by 17% as compared to 0.54 mn t last month (Dec’20). It contributed around 38% of total JSW sourcing. Vedanta remained the second largest supplier at 0.32 mn t. JSW iron ore sourcing from other private mines stood at 0.41 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 Kumarswamy mines. Karnataka Government could be soon extending Donimalai iron ore lease for 20 years, now that the PSU has agreed to a provisional 22.5 per cent premium.
Buyer-wise allotted quantity of Jan’21
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 0.68 mn t iron ore in Jan’21, down by 17% m-o-m against 0.82 mn t in Dec’20. Out of the total quantity sold by NMDC via e-auction, around 66% of the material was purchased by JSW Steel.
Other major suppliers last month were– Vedanta Ltd at 0.38 mn t, Vyasankere iron ore mines at 0.24 mn t.
Major Highlights of Jan’21 Karnataka iron ore e-auctions:
- Rashtriya Ispat Nigam Limited (RINL) bought around 44,000 t iron ore from NMDC Kumarswamy mines. The iron ore lumps Fe 60.15% were booked at INR 5,079/t and lumps Fe 63% booked at INR 5,822/t.
- Electrotherm India Ltd. – a Gujarat based company procured 16,000 t (12,000 t lumps and 4,000 t fines). The largest supplier was Vyasankere Iron Ore Mines at 12,000 t and P. Balasubba Setty & Son at around 4,000 t and. The booking price for Fe 65% stood at INR 5,930/t for fines and INR 6,250/t for lumps.
- Similarly, another Western India based pellet maker – Jindal SAW procured around 24,000 t iron ore. 8,000 t iron ore fines and 4,000 t lumps were from P. Balasubba Setty & Son, and 12,000 t lumps from Vyasankere iron ore mines.
- Vedanta Ltd. procured around 76,000 t iron ore from e-auction. Out of the total 28,000 t was fines and 48,000 t was iron ore lumps. The iron ore fines Fe 57.5% was booked at INR 2,907/t.
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