India: NMDC’s iron ore rake movements from Chhattisgarh fall nearly 30%, m-o-m, in May

• Sourcing from state based units drop 58%
• Drop in steel prices weigh on iron ore bookings
• JSPL sources 15 rakes from NMDC CG in May over nil in Apr

Government-owned NMDC recorded iron ore rake movements from Chhattisgarh at 299 in May’22, lower by 29% against 422 in Apr, according to data maintained with SteelMint. The figure include movements within Chhattisgarh and to other state-based units but exclude supply to AM/NS India through slurry pipeline. Notably, a rake carries 3,850 tonnes (t) of iron ore.

Lower capacity utilization of secondary steel mills amidst cost push and drop in finish steel prices impacted iron ore sourcing patterns, resulting in a drop in bookings.

P-DRI prices in central India corrected by around INR 3,000/t m-o-m in May. Finished steel prices also corrected downwards by INR 5,000-6,000/t in May on slower demand and falling export realisations.

RINL largest buyer: Rashtriya Ispat Nigam Limited (RINL) remained the largest buyer of NMDC’s iron ore from Chhattisgarh in May. RINL’s iron ore sourcing moved down by 22% to 112 rakes in May as against 143 in Apr.

NMDC’s total iron ore rake movements to plants-based outside Chhattisgarh were recorded at 272 last month compared to 357 in Apr.

JSW Steel recorded a 26% decrease in receipt of iron ore rakes from NMDC Chhattisgarh at 111 in May as against 150 in Apr.

Southern India-based pellet maker KIOCL recorded iron ore sourcing at 15 rakes in May, a sharp decrease as compared with 47 in Apr.

Chhattisgarh-based units source 27 rakes from NMDC: NMDC’s iron ore rake movements to Chhattisgarh-based units were recorded at 27 in May compared to 65 in the previous month, as per data maintained with SteelMint. However, the figures are lower compared to the monthly average of 75-80 rakes. Notably, the miner had rolled over prices last month before announcing cut of INR 750/t on 25 May’22.

Exports nil: NMDC’s long-term iron ore export contracts with Japanese steel mills (JSMs) and South Korea’s POSCO were scrapped as the key sop of a reduced 10% export duty was removed.

NMDC’s (Chhattisgarh) iron ore rake movement: Apr’22 vs May’22

Figs. exclude ArcelorMittal Nippon Steel India Limited’s movement through slurry pipeline.
Each rake carries approximately 3,850 t of iron ore
Source: SteelMint Research, Railways