Iron ore production from Odisha, the eastern Indian state which accounts for over half the country’s annual output, stood at 13.47 mn t in Apr’21, SteelMint data shows. Production from Odisha climbed to a 14-month high since over 15 mn t of iron ore output last recorded in Feb’20.
Increased volumes in Jan-Mar’20 were due to a sudden spurt in production prior to the termination and auction of leases before 31 Mar’20. Production in Apr’21 increased dramatically y-o-y from just about 5.70 mn t in Apr’20.
Higher output on a low yearly base
The reasons, however, are not far to seek when it comes to explaining why output from iron ore mines in the state shot up 136% on year. This was mainly due to a low yearly base- remember the dramatic decline in iron ore output last year following the inordinate delay in transfer of leases after the minerals auctions held before 31 Mar’20.
Moreover, production in the year-ago period suffered as a result of the outbreak of the first wave of the COVID pandemic, which severely impacted manufacturing and mining activities.
Apr’21 iron ore production volumes from Odisha have breached the 13 mn t/month level vis-a-vis 12.5 mn t recorded in Mar’21, thanks to increased volumes from new mines, especially those allotted to OMC.
Out of the total production from Odisha’s mines in Apr’21, the largest share was by JSW Steel at 2.03 mn t followed by OMC at 1.82 mn t and Tata Steel at 1.55 mn t.
While AM/NS India produced 0.43 mn t in the month under review, Serajuddin ramped up production to 1 mn t. State-owned steel major SAIL’s iron ore production from its mines in Odisha in Apr’21 was recorded by SteelMint at 1.11 mn t.
Outlook
SteelMint notes that iron ore production from Odisha is increasing m-o-m, as the iron ore sector completes the transition to a post-auctions regime in the state. Also, along with increasing volumes expected from state-owned merchant miners, major steelmakers who have acquired a considerable chunk of iron ore mines in the state post auctions are investing on mining infrastructure to raise output- JSW Steel being the prime example.
However, there is still supply shortage of required grades of ore from Odisha miners- even from state-owned miners- for downstream units and scarcity of certain grades are reportedly boosting prices.
Leave a Reply