India : Iron Ore Sourcing of Major Sponge Plants Stable in Nov’16

India’s 12 major sponge iron plants kept their iron ore sourcing stable last month. They sourced 3.57 MnT iron ore in Nov’16 compared to 3.53 MnT in Oct’16.

India’s sponge iron capacity is 47 MnT in FY16 out of which top sponge makers contribute the major part in India’s sponge iron production. SteelMint has tried to analyze iron ore sourcing pattern of India’s major sponge producers whose combined share is about 35% of India’s total sponge production capacity.

Essar Steel’s iron ore sourcing increased by 15% M-o-M to 1.1 MnT in Nov’16. It sourced 0.99 MnT iron ore from domestic market (NMDC Chhattisgarh and Odisha miners) and imported a vessel of 0.1 MnT pellets from Australia in Nov’16.

JSPL’s iron ore sourcing fell by 14% M-o-M in Nov’16 from 1.19 MnT in Oct’16 to 1.02 MnT in Nov’16.

West Bengal based Rashmi Metaliks raised its iron ore procurement by 17% M-o-M to 0.49 MnT in Nov’16. The company is actively participating in pellet exports and it exported 0.14 MnT pellets in Nov’16 against 0.10 MnT in Oct’16.

Iron ore sourcing of other major sponge makers in Nov’16 remained as follows: BMM Ispat – 0.14 MnT (up by 40% M-o-M), Shyam group – 0.15 MnT (down by 12% M-o-M) and Usha Martin – 0.15 MnT (up by 7% M-o-M).

Iron ore sourcing of major sponge plants – Nov’16 vs Oct’16

*It does not include procurement from their respective captive mines
Qty in MT
Provisional Data
Source: SteelMint Research

Sponge iron offers moved down 2-3% in Nov’16 – Monthly average sponge iron prices in India plunged upto INR 600/MT M-o-M in Nov’16 over limited trades in domestic market post currency demonetization. Many Indian sponge iron manufacturers started exploring export market to offset the negative impact of weak domestic demand.