B. Rudra Gouda and MEL, a couple of A grade mines located in the state of Karnataka offered a total of 316,000 MT of iron ore, through e-auction, on March 8.
They were free to decide the base price for themselves.
On February 22, only one-fourth of the total quantity of raw material offered by A grade mines could be sold on account of expensive ore.
And, on March, 232,000 MT (52%) of iron ore (lumps and fines) was sold out in the e-auction i.e. 73% of the whole quantity.
A senior official of a steel plant based in Karnataka told SteelMint, “Miners lowered the floor price this time as it was free to do so, looking at weak response previously.
Hence, they were able to make it with 100% of fines and JSW was buyer of a large quantity of fines.
Purchasing of lumps is not a compulsion but an option for JSW as it has pelletisation, sintering and beneficiation facilities.
As far as other steel units are concerned, lumps seemed to be expensive and hence disinterested buyers”.
B Rudra Gouda:
Floor price for fines was down by 28%, from Rs 2,180-3,430/MT to Rs 1,580-2,680/MT.
Whereas, for lumps, the reserve price dropped by 10%, from Rs 3,900-4,390/MT to Rs 3,520-3,950/MT.
MEL:
The floor price for fines was lowered by 3% from Rs 850/MT to Rs 825/MT.
In the e-auction, 100,000 MT (66%) of fines was taken away by JSW alone.
Of the total 35 bids, only 10 bids were received and 8 of those were winners.
The bid price was a 0.53% increase over the floor price.
B Rudra Gouda was able to sell out its entire fines but 51% (80,000 MT) of lumps only, out of 164,000 MT:
Fines 80,000 MT with Fe% 57 (JSW 72,000 MT) at Rs 1,580/MT
Fines 40,000 MT with Fe% 58 (JSW 28,000 MT) at Rs 1,705-1,725/MT
Fines 28,000 MT with Fe% 63 at Rs 2,720-2,730/MT
Lumps 80,000 MT with Fe% 61 Size 10-40 mm at Rs 3,950/MT
MEL was able to sell its entire (fines) quantity:
Fines 4,000 MT with Fe% 53 at Rs 905/MT
Royalty 10%, VAT 5.5% (on auction price and royalty), FDT 12% are applicable.
Quantity that was offered on March 8:
B. Rudra Gouda:
Iron ore fines (Rs/UOM)
80,000 MT of Iron ore fines Fe% 57 at Rs 1,580
40,000 MT of Iron ore fines Fe% 58 at Rs 1,705
28,000 MT of Iron ore fines Fe% 63 at Rs 2680
Iron ore lumps:
80,000 MT of Fe% 59 at Rs 3,520
4,000 MT of Fe% 61 at Rs 3,620
80,000 MT of Fe% 59 at Rs 3,950
MEL:
Iron ore fines
4,000 MT of Fe% +53 at Rs 825
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