Indian Steel Mills receiving Iron Ore Offers at USD 118/T CFR West Coast

Indian Steel Mills who have been seeking to import Iron ore due to temporary ban on 26 mines in Odisha (India’s largest Iron ore producing state), are receiving offers from South African miner at around USD 117-118/MT CFR West Coast for Iron ore lumps of grade 64% having tumbler index of 93%, according to trade source.

“We have offers from South African miner at around USD 118/MT CFR West Coast for Iron ore lumps of grade 64%. Shipment will take about 2 months. With Indian currency appreciating and domestic Iron ore prices rising up, we think we will go for imports till things get settled,” said a steel miller based in western region of India.

Recently, Indian private Iron ore miners have raised prices by INR 500/MT on lumps & fines. Current offers are INR 2,500/MT (USD 42/MT) for Fines (Fe 63%) and 5,750/MT (USD 97/MT) for Calibrated Lumps Ore (5-18mm, 63%) on Ex-Mines basis including royalty. Pellet prices are at around INR 8,500/MT (USD 144/MT,  63%) on Ex-Plant basis in Odisha.

Some steel millers also reported to have Iron pellet offers from Russia at around USD 137-140/MT CFR East Coast for grade 64 +/-1%.

How long will Iron Ore Supply impacted from Odisha Mining Ban

Odisha’s state government has referred 13 mines including Tata (7 mines) and SAIL (2 mines) for renewal on priority basis provided they fulfill the condition of paying penalty levied by the state government and get the forest clearance.

Sources say, process will take atleast couple of months for mining to get normal for captive miners. However, there is no official statement from government or companies.

Problem likely to continue with merchant miners. Regarding sale of inventories lying at mines head may be decided by the state government before 15 Jun, 2014. Till then mining operations and dispatches will remain closed for these 26 mines.

Odisha produced 72 MnT in FY14

Odisha produced around 72 MnT of Iron ore in FY14, out of which 10 MnT was from Tata, 6.5 MnT from SAIL, 8 MnT from Serajuddin, 5 MnT from KJS Ahluwalia, 7.5 MnT from Sarda Mines, 12 MnT from Rungta, 4.5 MnT from Indrani Patnaik, 2 MnT from JSPL, 2.1 MnT from OMC, 3 MnT from Essel , 3 MnT from AMTC, 2 MnT from MESCO and rest 6 MnT from other miners.

Major Merchant Mines Operational in Odisha

1. Rungta- Jajang, Oraghat, Sanindpur
2. Essel – Koira
3. Serajuddin- Balda
4. Indrani Patnaik – Unnchabali
5. S.N Mohanty
6. G.S Mishra
7. T.P Mohanty
8. MGM Minerals