Gujarat based Steelmaker Starts Sourcing Domestic Iron Ore from NMDC instead Imported

With rising global iron ore prices turning imported lump offers costly, a western India based steel maker has started sourcing iron ore from NMDC’s Bailadila mines in Chhattisgarh.

As per market participants report to SteelMint, Gallant Metal – Gujarat based steel maker has participated in the recently conducted iron ore e-auction for NMDC’s Chhattisgarh region namely Bacheli and Kirandul.

“Gallant Metal has participated in the recent e-auction and procured around 12 rakes of iron ore. Out of this, 6 rakes are of Baila lump and rest 6 are of DR-CLO. The steel maker will source the material offered from Bacheli and Kirandul and then via coastal movement carry the material to its plant”, shared an official from NMDC.

Presently, NMDC’s prices of Baila lump (6-40 mm, Fe 65%) are at INR 1,700/MT and that of DR-CLO (10-40 mm, Fe 67%) are at INR 1,960/MT. (Royalty, DMF, NMET & other taxes extra). Landed cost of Baila lump to their plant is expected to be around INR 4,300-4,400/MT and that of DR-CLO is heard to be around INR 4,700/MT, he added.

SteelMint’s assessment of imported lump at west coast is approximately USD 76/MT, CFR India (INR 5,100/MT, CFR India).

Imported South African lump offers up by USD 8/MT M-o-M

Offers for imported South African lump have moved up by USD 8/MT M-o-M in Aug’16 and are assessed at USD 76/MT, CFR India. Increasing iron ore prices in China coupled with increasing lump premium have made imported lump offers costlier. Spot iron lump premium is presently seen at USD 0.1915/DMT unit, CFR China.

Following this, iron ore lump importers have shifted their interest towards domestic market.

Domestic pellet offers in west India also witness uptrend

Jindal SAW also raised pellet offers. Current offers for Fe 63% pellets are assessed at INR 5,450/MT (delivered Kandla). On monthly premises, pellet offers have gone up by INR 300/MT.

Thus, it appears that owing to cost-competitiveness Gujarat based steel makers are showing interest in buying ore from NMDC (Chhattisgarh). It is to be noted that NMDC (C.G.) had rolled over iron ore prices for Aug’16 deliveries.