India: JSW Steel Increases Iron Ore Purchase from Karnataka Post NMDC Price Cut

JSW Steel has started purchasing iron ore aggressively from NMDC Karnataka post price reduction announcement made by the company on 22 Jun’18. JSW Steel’s iron ore purchases from Karnataka e-auctions stood at 1.06 MnT in Jun’18 up by 3% M-o-M compared to 1.03 MnT in May’18. Out of 1.06 MnT iron ore sourced by JSW in June, 0.45 MnT was supplied from NMDC. In May’18, JSW had bought 0.06 MnT iron ore from NMDC.

NMDC Donimalai decreased iron ore base prices around INR 300/MT in both fines and lump prices. NMDC Donimalai decreased fines (Fe 60.2%) base price around INR 300/MT to around INR 2,470/MT (basic) against last assessment INR 2,719/MT. Similarly, for Fe 62.5% lump prices have come down by around INR 300/MT to around INR 2,993/MT (basic) against last assessment INR 3,265/MT. All prices mentioned are basic. Royalty and other taxes extra.

Monthly iron ore sales volume in Karnataka e-auctions increased by 11% M-o-M in Jun’18. The total allotted quantity of iron ore stood at 1.97 MnT in Jun’18 compared to 1.77 MnT in May’18. Earlier in Apr’18 Karnataka e-auction sales had been come down to 3 years low to 1.3MnT.

NMDC iron ore sales increased sharply by almost four-folds in Jun’18- NMDC’s iron ore sales increased by almost four-folds M-o-M to 0.74MnT in Jun’18 compared to 0.20 MnT in May’18. NMDC Kumarswamy recorded an increase of more than two-fold in its sales volume to 0.32MnT in Jun’18 compared to 0.13 MnT in May’18 while sales from NMDC Donimalai mines has also increased sharply in six-fold this month to 0.42 MnT in Jun’18 compared to 0.07 MnT in May’18.

Buyer-wise allotted quantity of Jun’18 Iron Ore e-Auctions-

Qty in MT
Source: Karnataka DMG, SteelMint Research