JSW Steel Increases Iron Ore Sourcing by 10% in Jul’16

Iron ore sourcing of JSW Steel from Odisha mines and NMDC (C.G.) moved up significantly while its sourcing from Karnataka fell in Jul’16.

JSW Steel’s iron ore sourcing has witnessed considerable increase since beginning of FY17. In the first four months of FY17 (i.e. Apr’16-Jul’16) the steel giant sourced 8.72 MnT (up by 27% Y-o-Y). The steel maker aims to ramp up its crude steel production from 12.56 MnT in FY16 to 15.75 MnT in FY17. Hence in order to meet the growing requirement of iron ore the steel maker has raised its sourcing.

Sourcing from Odisha up by 28% in Jul’16

JSW Steel procured 0.51 MnT iron ore from Odisha based merchant miners in Jul’16 compared to 0.4 MnT in Jun’16. Its plant-wise procurement from Odisha in Jul’16 was as follows: JSW Vijayanagar – 0.17 MnT (up by 42% M-o-M), JSW Salem – 0.04 MnT (down by 60% M-o-M) and Dolvi – 0.29 MnT (up by 61% M-o-M).

In Jul’16, Odisha iron ore prices remained stable. Prices of fines (Fe 63%) was seen at INR 1,550/MT (loaded to wagons, incld royalty, DMF & NMET).

In Jul’16, JSW Steel was seen carrying iron ore directly from Odisha to its Torngallu railway siding for its Vijayanagar plant. Rail freight from Odisha to JSW Vijayanagar is around INR 2,500/MT. Contrarily in Jun’16 it was seen carrying ore to Dhamra siding via rake movement and then coastal movement to Krishnapatnam port.

Resumed iron ore purchase from NMDC (C.G.) in Jul

JSW Steel, Dolvi did not source a single rake of iron ore in Jun’16 but in the month of Jul’16 it procured 65 rakes (0.25 MnT) from NMDC’s Bailadila mines in Chhattisgarh. In Jul’16, NMDC kept its fines prices unchanged at INR 1,460/MT (royalty, DMF, NMET & other taxes extra).

Purchases from Karnataka down by 10% M-o-M

JSW Steel sourced 1.46 MnT iron ore (0.86 MnT fines and 0.60 MnT lump) in Jul’16 compared to 1.62 MnT in Jun’16. For its Vijayanagar plant it sourced 1.42 MnT iron ore and for its Salem plant it procured 44,000 MT lump via Jul’16 e-auctions.

Base prices in Karnataka e-auctions have remained unchanged on monthly premises. NMDC has kept its base prices unmoved in Karnataka since beginning of this fiscal despite the miner has made price cuts in Chhattisgarh.

Iron ore imports remain intact

In the month of Jul’16, JSW Steel, Dolvi imported a vessel of 161,600 MT vessel of Kumba fines from South Africa. In Jun’16 the steel maker imported 170,000 MT Carajas fines from Brazil.

Since no e-auction was conducted in Goa hence the steel maker did not procure any material from there. Also its sourcing from Jharkhand continues to remain nil in Jul’16.

JSW Steel’s iron ore sourcing and crude steel production

Provisional data
NA-Not Available
Source: SteelMint Research, Customs, Karnataka DMG, Railways