Cheaper Iron ore lump offers from South Africa may force NMDC to review their prices for May deliveries. South African lump prices have fallen to USD 64-66/MT, CNF India amid declining Iron ore prices in the global market.
Current offers for South African imported lump (Fe 65%) are around USD 64-66/MT, CNF Krishnapatnam Port for May/June deliveries. A market participant shared that there is good stock of imported lump from South Africa at Krishnapatnam Port.
South Africa, which has been a major source for Indian Iron ore imports, occupied 38% share in total Iron ore imports to India in FY15. Other major sources for imports were Brazil, Australia, Oman & Canada.
Indian steel manufacturing companies are still preferring imported Iron ore against domestic ore owing to its consistent availability and falling Iron ore prices in the global market, which plunged to 10-year low.
NMDC Iron Ore Prices may come under pressure
NMDC, which kept its prices unchanged for April, may have to cut its prices for May, owing to rising pressure from cheaper imports. Steel & Sponge iron makers are more inclined towards imported ore.
Recently RINL (Vizag Steel), NMDC’s largest customer of Iron ore, has also floated a tender of 100,000 MT Iron ore from different sources, including imports.
“Sponge iron manufacturers prefer imported lump from South Africa over NMDC lumps owing to quality and price. Readily available stock is offered at INR 5,100-5,200/MT (including customs and port charges) at Krishnapatnam Port,” said a Sponge and Iron ore trader based in Hyderabad.
Iron ore imports are being preferred by Western India based steel mills too. In FY15, 2 MnT Iron ore was imported at major ports of Gujarat.
“Current offers for South African imported lump (Fe 65%) are in the range of USD 64-66/MT, CNF Kandla. The landed cost of the imported lump to the plants is in the range of INR 4,600-4,700/MT, which is comparatively economical against the Pellet available in the domestic market at around INR 5,300-5,600/MT, delivered to Kandla,” said a manufacturer based in Gujarat.
Iron ore imports to India are likely to fall this fiscal as Odisha government may allow resumption of mining operations at banned mines with certain terms & conditions. Also, Iron ore production from Karnataka is likely to improve as state based miners under FIMI have filed an affidavit in the SC for capacity improvement in Mar’15. Thus, there will be ample availability of Iron ore in domestic market, which will resist imports.
Recent Iron Ore Imports from South Africa
| Port | Vessel Name | Quantity | Shipper | Status | Date | Update Date |
| Krishnapatnam | Rzs Harmony | 167,600 | JSW Steel | Berth | 6 Mar’15 | 12 Mar’15 |
| Mormugao | Hanjin Sato | 54,000 | Amba River Coke | Berth | 10 Mar’15 | 13 Mar’15 |
| Paradip | Bulk Indonesia | 82,000 | Tata | Berth | 18 Mar’15 | 25 Mar’15 |
| Kandla | Conti Jade | 88,000 | Gallant/Monosteel / Wespun | Berth | 25 Mar’15 | 27 Mar’15 |
| Hazira | Cape Venture | 132,000 | Essar | Berth | 10 Apr’15 | 13 Apr’15 |
| Krishnapatnam | Devongate | 37,645 | Mehta Trading Corporation | Anchorage | 11 Apr’15 | 13 Apr’15 |
| Tuticorine | Dorado | 15,000 | Kamachi Group | Expected | 13 Apr’15 | 13 Apr’15 |
| Krishnapatnam | Dorado | 39,800 | Kamachi Group | Expected | 15 Apr’15 | 13 Apr’15 |
Quantity in MT; Provisional Data
Source: SteelMint Stats, Customs
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