- JSW Steel looks to increase its Iron Ore/Pellets sourcing from Odisha and Jharkhand.
- Imports of Iron Ore and Pellets to India not viable at the moment.
- Falling Rupee has increased exports of iron pellets from India.
JSW Steels Ltd, India's largest privately owned steel manufacturer, with an annual capacity of 14.3 million tonnes is about to ship one vessel of Iron pellets quantity (approx 40,000 tonnes) from Dhamra port (Odisha). This cargo has been procured from Jindal Steel and Power's 4.5 million tonne pellet plant, located in Barabil (Odisha). Trade sources say that this shipment will be either used for its Dolvi or Salem plant. These plants, has a combined capacity of 4.3 million tonnes per annum (MTPA) and account for about 30 per cent of JSW's total capacity.
Facing iron ore shortages for more than 18 months, JSW Steel has been aggressively participating in E-auction conducted in Karnatka and also securing iron ore from private miners based in Odisha and Jharkhand. However this is the first time JSW steel has bought any iron pellet cargo from Eastern region of the country. Previously JSW steel had secured some pellet shipments from state owned pellet plant KIOCL (3.5 MTPA), which is located on the western region.
The Supreme Court has fixed the limit of iron ore production at 30 million tonnes per annum in Karnataka. As per the current availability, Category A mines will give about 5 million tonnes t and Category B mines will give another 8 million tonnes by the end of this year. Though NMDC has permission to produce 12 mt per annum, it's able to supply only about 9-10 million tonne. JSW has been buying over 60 per cent of the total material put on auction according to a source close to this matter.
Overall, the company needs about 23 million tonnes of iron ore annually to produce steel at its optimum capacity.
As of now, we are dependent on e-auctions in Karnataka to source the raw material. We are also looking at sourcing iron ore from Odisha and Chhattisgarh in limited quantity. We will bring about two-three mt of iron ore this year from these states, said one of the JSW officials to reporters some time back. Our imports of iron ore and pellets will rise in FY 2013-2014 owing to restricted availability, he also mentioned.
However it looks that company is compensating its import requirement with local sourcing as imports are not viable on weak Rupee.
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