JSW Steel Iron Ore Sourcing in Feb’16

India’s second largest steelmaker, JSW Steel has installed capacity of 14.3 MnT pa. Currently, the steelmaker source iron ore majority from Chhattisgarh, Karnataka and via imports.

In Feb’16, the steelmaker procured around 2.33 MnT iron ore. Majority of purchases was from Karnataka e-auctions. Iron ore purchases in Feb’16 increases as compared to Jan’16 which was 1.42 MnT.

Chhattisgarh

Since three consecutive months, no iron ore movement is seen from NMDC C.G. mines to JSW Steel, Dolvi plant. JSW Steel, Dolvi generally procures 0.3-0.4 MnT iron ore every month from NMDC C.G. mines.

Since, Dec’15 to mid Feb’16, global iron ore prices record low and touched to a level of USD 37/MT. So, as imported ore was cost effective compared to domestic ore, the steelmaker turned purchases towards imported ore.

In addition, JSW Dolvi plant, having current capacity of 3.3 MnT pa was under capacity expansion plan since Nov’15. The expanded capacity would be 5 MnT pa which will be operational soon. By far till Feb’16, the steelmaker procured only 1.26 MnT iron ore from NMDC C.G. mines.

Karnataka

Since few months, the steelmaker procured majority of the material from Karnataka e-auctions. In Feb’16, total 2.33 MnT iron ore was procured from e-auctions for its Vijayanagar and Salem steel plants. Since Nov’15, Vijayanagar plant was under expansion to add additional 2 MnT pa capacity to 10 MnT pa which is now completed.

JSW Steel increased iron ore purchases to almost double in Feb’16. By far till now, the steelmaker procured 16.4 MnT iron ore from Karnataka e-auctions.

Odisha

In Feb’16, JSW Steel resumed iron ore purchases from Odisha. The steelmaker procured 7,700 MT iron ore via 2 rakes in Feb’16. Its been long gap, JSW stopped iron ore purchases from Odisha as imported iron ore became cost effective against the domestic material. But, currently due to sudden hike in global prices by the end of Feb’16 (nearly USD 10/MT M-o-M), the steelmaker has turned interest towards domestic purchases from Odisha.

Goa

Iron ore purchases from Goa continuous to remain nill from two consecutive months (Jan’16-Feb’16). However, no iron ore e-auction was held in Goa in the month of February. Next Goa e-auction is going to held soon in which the govt. has put around 7.76 MnT iron ore under hammer. JSW Steel procured only 0.05 MnT iron ore from Goa e-auction in the month of Dec’15 in FY16.

Jharkhand

Purchases of iron ore from Jharkhand continuous to remain nill from a long period of time.

Imports

In Feb’16, JSW Steel’s iron ore imports remained nill. But, there are few shipments lined for March deliveries. By far till Feb’16, the steelmaker imported 1.28 MnT iron ore majorly from Brazil, South Africa, Australia.

JSW Steel iron ore sourcing in Feb’16

Qty in MnT
Provisional data
Source: SteelMint Research, Customs, DMG, Railways