JSW Steel Resumes Iron Ore Purchases from Odisha

After a long gap JSW Steel has resumed iron ore purchases from Odisha. The steel maker had stopped sourcing iron ore from Odisha after imported iron ore became cost effective against the domestic material.

But with sudden hike in global iron ore prices (up by USD 9/MT M-o-M), the steel maker has turned towards domestic purchases from Odisha.

The iron ore fines which is being sourced by the steel maker would be utilized at its Dolvi plant in Maharashtra which has undergone a capacity expansion from 3.3 MnT pa to 5 MnT pa.

“After capacity expansion at JSW Dolvi there would be requirement of around 0.6-0.7 MnT iron ore on a monthly basis. And sudden increase in global iron ore prices has forced to shift towards domestic ore. JSW Dolvi will source around 0.14 MnT iron ore fines (Fe 63%) from Odisha by Mar’16” shared a market source.

Current prices of Odisha fines (Fe 63%) of Rungta Mines are INR 1,550/MT (loaded to wagons & including Royalty). Considering other extra expenses the landed cost of fines to Dolvi plant will stand around INR 3,100-3,200/MT.

By far in this fiscal, JSW Steel has sourced 16.7 MnT iron ore (till Jan’16). Also, there are around three iron ore import vessels of the steel giant in pipeline to arrive by Mar’16.

JSW Steel iron ore sourcing in FY16 (Till Jan’16)

Provisional data
Source: SteelMint Research, Karnataka DMG, Goa DMG