Iron ore e-auctioned in Karnataka yet again fetched poor response from steel makers over high base price fixed by NDMC, said market participants.
“MSTC auctioned around 1 million tonnes of iron ore on 11th Dec, out of which only 20 percent was sold. Most of the participants took interest in high grade iron fines, where as lumps went unsold.
There is good demand for iron fines as most of bidders are either pellet manufacturers or blast furnace plants. Also base price fixed for fines is Rs 2610 per tonne , where as lumps is Rs 5400 per tonne.
The buyers are required to pay the final bid price and 10% royalty, 12% forest development tax and 5.5% value added tax to the state government on the exact quantity of ore purchased at the auctions. After adding all these taxes, the landed cost of iron ore works out much higher and is beyond the reach for smaller steel companies.” said a steel manufacturer based in Koppal, Karnataka.
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