Karnataka iron ore e-auction sales volumes decreased sharply by 35% m-o-m in May 2022. The total allotted quantity in the month under review was 1.25 million tonnes (mnt) compared to the previous month’s 1.91 mnt.
JSW’s iron ore sourcing from Karnataka auctions drops: Purchases by JSW Steel, the largest buyer from Karnataka’s iron ore e-auctions, decreased by 40% in April. The company purchased around 0.58 mnt of iron ore from the Karnataka auctions last month against 0.97 mnt in April.
Out of the total volume, NMDC supplied 0.12 mnt (a significant drop compared to 0.58 mnt in April) of iron ore, accounting for around 20% of JSW Steel’s total sourcing.
Vedanta remained the second-largest iron ore supplier to JSW Steel at 0.35 mnt last month, a sharp increase against 0.18 mnt in April.
Buyer-wise allotted quantities in May iron ore e-auctions
Qty in tonnes (t)
Source: Karnataka state govt, DMG, SteelMint Research
All prices mentioned are basic, taxes extra
Sales from NMDC down 80% m-o-m: NMDC sold 0.16 mnt of iron ore via the Karnataka e-auctions in May against 0.80 mnt in April.
Iron ore sales from the other leading miner, Vedanta, were recorded at 0.43 mnt in May against 0.30 mnt a month ago.
Highlights of Karnataka iron ore e-auctions in May:
- Vedanta procured 80,000 tonnes (t) of iron ore, of which 48,000 t were fines (Fe 57.5%-65.4%) and 32,000 t were lump ore (Fe 63.78%-65%).
- Eastern India-based Electrosteel Castings Limited booked 4,000 t of iron ore lumps (Fe 63%) at INR 4,641/t from Ramanadurga Iron Ore Mine.
Outlook: In a crucial development for India’s iron ore industry, the Supreme Court, on 20 May, 2022, lifted curbs on exports of iron ore from Karnataka and eased all restrictions on sales of iron ore from the districts of Bellary, Chitradurga and Tumkur where mining activity had been prohibited following rampant encroachment in forest land by mining companies and illegal mining in 2011.
It further noted: “We permit to sell already excavated iron ore stock in the three Karnataka districts. Permission also granted to allocate iron ore by entering into direct contracts without resorting to e-auction.”
Following this, only a couple of miners like NMDC and Vedanta have been seen conducting auctions. However, other private miners are still awaiting clarity on sales, following which sales volumes have further fallen in May.
To know more about, Will Indian export volumes increase sharply from Karnataka?
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