India: Karnataka iron ore e-auction sales remain largely stable in Feb’21

Karnataka iron ore e-auction sales volume remained largely stable in Feb’21. The allotted iron ore quantity was 2.26 mn t in Feb’21 compared to 2.2 mn t Jan’21, as per data maintained with SteelMint.

JSW Steel’s iron ore sourcing from Karnataka e-auctions fell 6% in Feb’21: JSW Steel’s iron ore purchases from Karnataka e-auctions decreased by 6% to 1.11 mn t in Feb’21 compared to 1.18 mn t in Jan’21. Out of 1.11 mn t iron ore sourced by JSW in Feb’21, Vedanta supplied 0.38 mn t, higher against 0.32 mn t in Jan’21. It contributed around 34% of total JSW sourcing. NMDC stood the second largest supplier at 0.29 mn t. JSW iron ore sourcing from other private mines stood at 0.44 mn t.

JSW expects to produce around 7-8 mn t iron ore from nine captive mines in Karnataka in FY’21, which will be used at its Vijayanagar plant.

Buyer-wise allotted quantity of Feb’21 e-auctions

Qty in t
Source: GOK, DMG, SteelMint Research

Vedanta Limited stood the largest iron ore supplier:
Vedanta Ltd was the largest iron ore supplier via Karnataka e-auction and sold 0.55 mn t iron ore in Feb’21, up by 45% m-o-m against 0.38 mn t in Jan’21. Out of the total quantity sold by Vedanta via e-auction, around 70% of the material was purchased by JSW Steel.

Other major suppliers last month were—NMDC Kumarswamy mines at 0.47 mn t, Vyasankere iron ore mines at 0.28 mn t.

Major highlights of Feb’21 Karnataka iron ore e-auctions:

•  Rashtriya Ispat Nigam Limited (RINL) bought around 20,000 t iron ore from NMDC Kumarswamy mines. Entire material was iron ore lumps Fe 63%, booked at INR 5,254-5264/t.
• Electrotherm India Ltd. – a Gujarat based company procured 12,000 t iron ore lumps. Vyasankere Iron Ore Mines supplied 8,000 t and P. Balasubba Setty & Son at around 4,000 t. The booking price for Fe 65% stood at INR 5,650/t.
• Similarly, another Western India based pellet maker – Jindal SAW procured around 12,000 t iron ore from P. Balasubba Setty & Son i.e 8,000 t iron ore fines Fe 63.19% at INR 4,610/t and 4,000 t iron ore lumps Fe 64.3% at INR 5610/t.
• Vedanta Ltd. procured around 36,000 t iron ore from e-auction. Out of the total 16,000 t was fines and 20,000 t was iron ore lumps. The iron ore fines Fe 58.25% was booked at INR 2,613/t.
• NMDC has restarted operations from 18th Feb at its Donimalai iron ore mine, the company said in its recent BSE filing. It resumed operations after obtaining a lease extension for 20 years w.e.f. 03 Nov’18 from Govt. of Karnataka and completing the associated statutory requirements. The mine has an EC limit of 7 mn t pa.
• Chowgule and Company Private Limited (CCPL) is likely to resume production of pellets at its 1.8 mn t pa pellet plant-based in Goa, credible sources have reported to SteelMint. Sources indicate the plant to be restarted by end-Mar’21. It procured 44,000 t iron ore in Feb’21 Karnataka auctions.