Karnataka iron ore prices have been declined starting FY16. Alongside, NMDC’s lump (Fe 62%) prices have drastically fallen by 50% and fines (Fe 60%) have fallen by 36% starting FY16 (Apr-15-Jan’16). In-line, private miners have also reduced iron ore lump (Fe 62%) prices by 31% and fines (Fe 60%) by 49% in the same time frame.
Karnataka’s iron ore price trend since Jan’14
Bid prices for iron ore fines (Fe 60% weighted average) offered in Karnataka iron ore e-auctions had been consistenly fallen upto 66% during past 1 year. In similar lines, bid prices for lump (Fe 63%) fallen by 64% since 1 year.
Karnataka iron ore e-auctions scenario in Jan’16
NMDC and private miners both offered their material in Karnataka iron ore e-auctions conducted in the month of Jan’16. Total 1.83 MnT iron ore was allotted in this auction against 2.40 MnT in the month of Dec’15. Iron ore sales via Karnataka e-auctions dropped down by 23% M-o-M.
Private miners sold 1.06 MnT iron ore and NMDC sold only 0.77 MnT ( Donimalai sold 0.33 MnT and Kumarswamy sold 0.43 MnT) iron ore.
According to market sources, the ongoing issue of FDT (Forest Development Tax) have led to lesser sales from Karnataka e-auction in Jan’16. Buyers are seeking refund of FDT paid over years. However, various mine owners had already signed a petition in state High Court but, Karnataka High Court is yet to notify about it.
Prices
NMDC: Bids received were flat for NMDC’s lump. Base and bid prices for lump (Fe 62.6) offered by NMDC stood in the range of INR 1,460-1,470/MT. Similarly, Base and bid prices for fines (Fe 60.8) stood at INR 1,236/MT.
Private Miners: Base and bid prices for lump (Fe 60.3) were in the range of INR 1,220-1,245/MT. Base and bid prices for fines (Fe 61.2) were in the range of INR 1,128-1,115/MT.
Note: Prices mentioned above are basic excluding 15% royalty and 12% Forest development tax
Supplier-wise Allotted Quantity in Jan’16
| Supplier | Fines | Lumps | Grand Total |
| NMDC | 368,000 | 406,000 | 774,000 |
| Private Minerals | 796,000 | 268,000 | 1,064,000 |
| Grand Total | 1,164,000 | 674,000 | 1,838,000 |
Qty in MT
Source: Karnataka DMG
JSW Steel-iron ore procurement
JSW Steel procured 1.05 MnT iron ore (740,000 MT fines & 316,000 MT lumps) in Jan’16. However, iron ore purchases were more in Dec’16 i.e. 1.69 MnT. Reasons behind lesser procurement is FDT issues as well as shift in iron ore purchase pattern. In Jan’16. JSW Steel imported 2 bulk cargoes of iron ore fines and concentrate from Brazil. This would be the reason behind lesser procurement in Jan’16.
Bidder-wise Allotted Quantity in Jan’16
| Company | Fines | Lumps | Grand Total |
| JSW Steel | 740,000 | 316,000 | 1,056,000 |
| BMM Ispat | 144,000 | – | 144,000 |
| MSPL | 84,000 | – | 84,000 |
| Gerdau Steel India | 28,000 | 8,000 | 36,000 |
| Kej Minerals | 16,000 | 20,000 | 36,000 |
| Others | 152,000 | 330,000 | 482,000 |
| Grand Total | 1,164,000 | 674,000 | 1,838,000 |
Qty in MT
Source: Karnataka DMG
Note: Grade & prices mentioned above are weighted average.
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