How Indian Iron Ore Market performed in H1 2014?

Production

• Indian Iron ore production stood at around 152 MnT in FY14, according to a provisional data released by IBM.

Production in MnT
Provisional data
Source: SteelMint Research

1. Iron ore production in first half of 2014 gained momentum after Serajuddin mines (Odisha) was granted an additional EC of 11 MnT
2. Mining suspension in Odisha expected to reduce production levels to 62-65 MnT in FY15 in the state
3. Karnataka expected to produce 21-22 MnT in FY15 provided the Supreme Court clears pending applications

Karnataka & Odisha Prices

Karnataka

1. Fines prices in Karnataka decreased on account of rising imports and increased output in the state
2. Lump prices remain stable in H1 2014 owing to less preferable by the manufacturers because of uncertainty over grade & quantity
3. Total allotted quantity of Iron ore in H1 2014 stood at 14.3 MnT
4. JSW Steel was the major buyer in the e-auctions
5. In the forthcoming months, ’C’ category mines are anticipated to be operational, for which JSW Steel is aiming. If things work out, it will decrease its offtake from other mines 

Odisha

1. Iron ore prices remain constant till the apex court ordered suspension of mining operations on 16 May, 2014
2. After the imposition of interim mining embargo, the miners increased their offers by INR 400-500/MT
3. Also, ambiguity over pricing issues of 50:50 rule overshadowed the entire scenario
4. CEC, after conducting its visits to mines, has presented the file to the Supreme Court and miners have maintained constant prices, as they are waiting for the apex court’s decision

Exports

1. Iron ore exports from India had witnessed a downtrend since Mar, 2014 owing to poor steel demand in China and appreciating INR against USD
2.  Iron ore export prices are unviable for exporters which led to decrease in export volumes since Mar’14
3. India has exported 5.4 MnT Iron ore in H1 2014
4. Iron ore mining in Goa is anticipated to start in Q3 FY15, which will boost up the exports

Imports

• Shortfall in availability of Iron ore in the domestic market has bounded steel giants namely JSW Steel & Tata for imports
• In H1 2014, 0.2 MnT Iron ore has been imported by India, which is increasing continuously
• Favorable global Iron ore prices and appreciating INR helped the companies to import the raw material
• Imports expected to touch 7-8 MnT in FY15