In June 2024, the National Mineral Development Corporation (NMDC), India’s largest iron ore miner, dispatched 447 rakes from its Chhattisgarh mines, equivalent to 1.72 million tonnes (mnt) of iron ore. This marks a 45% rise compared to 309 rakes (1.18 mnt) recorded in May, as per BigMint data.
These rake movements encompass movements within Chhattisgarh and to other state-based units exclude supply to AM/NS India through slurry pipeline. It is worth noting that each rake carries 3,850 tonnes (t) of iron ore.
The miner witnessed significant disruptions in its production and dispatches due to a workers’ agitation which erupted in the first week of May. However, later supply side prevailed normal. In June, steel mills tried to restock before monsoon.
Sourcing by non-state units rise
Rashtriya Ispat Nigam Ltd (RINL) emerged as the top buyer, iron ore rake movements were stable m-o-m from NMDC Chhattisgarh. In June, RINL received 116 rakes similar to the previous month.
JSW Steel received 94 iron ore rakes in June, rise of 40% as compared with 67 rakes in May.
JSPL recorded an increase of 20% in its iron ore rake bookings from NMDC at 30 in June, compared to 25 in May.
AM/NS sourced 34 rakes in June, a significant rise of 126% against 15 rakes in May.
KIOCL, a south India-based pellet maker have resumed its plant operations from 29 May and sourced two rakes in June against just three in May.
Overall, NMDC’s total iron ore rake movements to plants outside Chhattisgarh reached 318 in June, reflecting a 30% growth against 245 in May.
Sourcing by Chhattisgarh-based units head north m-o-m: Total number of rakes of NMDC carrying iron ore to the Chhattisgarh-based units was 129 (0.49 mnt) in June, from 63 rakes (0.24 mnt) recorded in May. In addition, NMDC’s supplies to its Nagarnar plant increased in June to 65 rakes compared to 33 in May.
NMDC has decreased prices of iron ore fines and lump ore by INR 500/t ($6/t) each in June. The iron ore lumps prices were (6-40mm, Fe 65.5%) at INR 5,950/t ($/t) and iron ore fines prices were (-10mm, Fe64%) at INR 5,110/t ($67/t) from Chhattisgarh mines. Prices include royalty, DMF and NMET charges.
NMDC recorded its output at 9.19 mnt in Q1FY’25 (April-June 2024), down by 14% y-o-y as against 10.70 mnt in Q1FY’24. Iron ore sales also dropped by 10% y-o-y to 10.07 mnt in Q1FY’25 as against 11.15 mnt in Q1FY’24. Meanwhile, production volumes increased significantly by 44% m-o-m to 3.37 mnt in June, 2024 as compared to 2.34 mnt in May, 2024.
Outlook
It is expected that the NMDC rake movement may slowdown in July due to approaching monsoon season.
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