India: NMDC’s iron ore rake movement from Chhattisgarh up 25% m-o-m, in Jan’22

Government-owned NMDC recorded iron ore rake movements from Chhattisgarh at 491 in Jan’22, up 25% against 394 in Dec’21, according to data maintained with SteelMint. The figures include movements within Chhattisgarh and to other state-based units but exclude supply to AM/NS India through slurry pipelines. Notably, a rake carries 3,850 tonnes (t) of iron ore.

RINL largest buyer in Dec’21: Rastriya Ispat Nigam Limited (RINL) remained the largest buyer of NMDC’s iron ore from Chhattisgarh in December. RINL’s iron ore sourcing inched down by 5% to 179 rakes in Jan’22 as against 189 in Dec’21.

NMDC’s total iron ore rake movements to plants based outside Chhattisgarh were recorded at 388 last month compared to 302 in December.

JSW Steel recorded a 35% increase in receipt of iron ore rakes from NMDC Chhattisgarh at 105 in Jan’22 against 78 in Dec’21. This could be largely due to expansion of the Dolvi plant from 5 mnt to 10 mnt/year. The expansion included installation of a 4.5 mnt/year blast furnace, a 5 mnt steel melting shop, a 5 mn t hot strip mill, apart from a 4 mnt/year pellet plant. JSW Steel’s standalone crude steel production guidance for FY’22 is 18.5 mn t.

Southern India-based pellets maker KIOCL sharply increased iron ore sourcing to 76 rakes in Jan’22 from 7 in Dec’21. It is to be noted that the Karnataka-based company had been under shutdown in Oct’21 and the news of resumption of production by the company was received in November.

Supplies to Chhattisgarh-based units up 12%: NMDC’s iron ore rake movements to Chhattisgarh-based units were recorded at 103 in Jan’22 compared to 92 a month ago, as per data maintained with SteelMint. After the miner had reduced prices by INR 300-500/t for January deliveries, Raipur-based sponge players preferred NMDC over pellets which pushed up sales volumes. Pellet trade volumes for Raipur fell by 25% m-o-m in Jan’22, as per PELLEX data recorded with SteelMint.

Not to forget, the miner has also been ramping up its production. It produced 3.42 mnt of iron ore in Jan’22 as against 2.92 mnt in the previous month.

Movement for exports nil: NMDC’s long-term iron ore export contracts with Japanese steel mills (JSMs) and South Korea’s POSCO were scrapped as its key sop of a reduced 10% export duty was removed as against the normal 30% paid by private iron ore exporters.

NMDC’s (Chhattisgarh) iron ore rake movement: Jan’22 vs Dec’21

Figs. exclude ArcelorMittal Nippon Steel India Limited’s movement through slurry pipeline.
Each rake carries approximately 3,850 t of iron ore
Source: SteelMint Research, Railways