Integrated steel-maker SAIL sold 700,000 t of iron ore through auctions in the merchant market in Jan’21 from its captive mines in Odisha and Chhattisgarh. Sales fell slightly compared to nearly 750,000 t in Dec’20. Total iron ore sales at auctions since May’20 has exceeded 3.4 mn t, as per SteelMint data.
While sales from the Bolani, Barsua and Taldih iron ore mines in Odisha under the company’s Raw Materials Division (RMD) aggregated nearly 650,000 t in Jan’21, 56,000 t of iron ore was auctioned from the Rajhara mine under Bhilai Steel Plant (BSP) in Chhattisgarh. Overall sales dwindled in the month owing to zero allocations from the company’s captive mines in Jharkhand.
Over 285,000 t of iron ore from SAIL’s Kiriburu and Meghahatuburu mines in Jharkhand had boosted sales volumes in Dec’20. SAIL started supplying iron ore from its Jharkhand mines in Dec’20 following a Union Ministry of Mines circular relaxing norms pertaining to obtaining mandatory permission from the state government before conducting iron ore auctions.
In addition, the Taldih mine located in Odisha’s Barsua-Taldih-Kalta iron ore reserve recorded sales of 80,000 t during the month, although the captive mine of Visvesvaraya Iron & Steel Ltd. at Bhadravati in Karnataka posted nil sales compared to 36,000 t in Dec’20. SteelMint reported recently that SAIL has conducted auctions for low-grade fines and tailings (Fe59%) from its mines in Odisha.
Prices inch down
Bids at an auction for 104,000 t iron ore fines (Fe62.5%) from Bolani mines fell by INR 750/t on 30 Jan’21, with only 72,000 t receiving bids at INR 4,250/t (excluding royalty) compared to the previous auction held in mid-Jan’21. SteelMint assesses weighted average prices for Fe62.5% Bolani fines at INR 4,850/t – down from INR 5,400/t in Dec’20 and INR 5,550/t in Nov’20. Iron ore fines (Fe60-61%) prices from the company’s Chhattisgarh mines have slid by over INR 100/t compared to Dec’20 and stands at INR 4,210/t.
SteelMint notes that prices have corrected downwards owing to improved supplies of iron ore, especially from Odisha, and decline in semi-finished steel and sponge iron prices. Merchant iron ore dispatches from Odisha (excluding movement from captive mines of integrated steel producers as well as exports) increased 13% to 6.82 mn t in Dec’20, while dispatches from Chhattisgarh picked up 19%.
SteelMint’s benchmark index for Odisha iron ore fines (Fe 62%) stands at INR 5,900/t (ex-mines, including royalty, DMF & NMET), lower by INR 100/t w-o-w. Prices are expected to remain under pressure due to sharp downturn in steel prices.
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