JSW Steel Increases Iron Ore Sourcing from Odisha in Apr’16

The steelmaker doubled its procurement from Odisha post NMDC price hike in Apr’16 and costlier imports.

JSW Steel-India’s 2nd largest private sector steel making company raised its iron ore procurement from Odisha considerably in Apr’16.

JSW Steel doubles its sourcing from Odisha over increased viability

In Apr’16, JSW Steel sourced 105 rakes of iron ore from Odisha (primarily Rungta Mines). Thus, in total it procured 0.4 MnT iron ore from Odisha in Apr’16 against 0.18 MnT in Mar’16.

It is to be noted that Odisha iron ore fines prices remained unchanged throughout the month of Apr’16 and were seen at INR 1,550/MT (loaded to wagons, inclusive of Royalty, DMF & NMET) for Fe 63% fines. Hence ample availabillity and cost effectiveness among other options compelled the steel maker to raise its purchases from Odisha.

41 rakes of iron ore procured from NMDC (C.G.) in Apr’16

JSW Steel, Dolvi sourced 0.16 MnT (41 rakes) from NMDC Bailadila mines in Chhattisgarh in Apr’16. In Mar’16, the steel biggy had procured 0.14 MnT iron ore in Mar’16 from NMDC (C.G.)

NMDC had raised iron ore fines prices by INR 150/MT M-o-M in Apr’16 to INR 1,860/MT (FoR, royalty & other taxes extra). Thus hike in NMDC’s iron ore prices narrowed down the viablity for the steel maker.

Sharp increase in global iron ore prices make imports less attractive

Increase in seaborne iron ore prices in China, stronger steel margins and less domestic iron ore production in China lifted up seaborne iron ore prices in China in Apr’16. In China, prices moved up by around USD 11/MT M-o-M.

JSW Steel, which procures fines & pellet feed/concentrate majorly from Brazil observed three import vessels in Apr’16 amounting to 0.47 MnT. It looks the that they were the held cargoes which were booked before but they arrived in Apr’16. Price of concentrate (Fe 65%) was assesed at USD 71.4/MT, CFR China towards end of Apr’16, up by USD 10/MT M-o-M. Thus, surge in global prices forced the steel giant to go for domestic purchases.

Sourcing from Goa & Jharkhand continues to remain nil in Apr’16

JSW Steel didn’t participate in 15th Goa e-auction conducted on 27 Apr’16. As 70% of the material offered in the e-auction comprised of ROM and out of 0.48 MnT fines offered there very few lots of high grade fines thus making it less attractive for JSW Steel to bid for in the e-auction.

JSW Steel’s sourcing from Jharkhand continues to remain nil in Apr’16.

JSW Steel Vijaynagar and Salem procured 1.28 MnT iron ore from Karnataka

JSW Steel sourced 1.28 MnT iron ore from Apr’16 Karnataka e-auctions. The steel biggy bought fines (Fe 60.7%) at bid price of INR 1,540/MT and lump (Fe 62.9%) at bid price of INR 1,890/MT. (Grade & bid prices mentioned are weighted average).

JSW Steel iron ore sourcing in Apr’16

Provisional data
Source: SteelMint Research, Customs, Karnataka DMG, Railways