Indian Iron ore imports continue to rise, as JSW Steel finalizes an import deal with Mauritania for the first time in FY15.
JSW is expecting second vessel of 148,000 MT (0.14 MnT) Iron ore at Krishnapatnam port (Andhra Pradesh) on 20 Jul, 2014; vessel name is Eternus. The company is importing Mauritania (Western North Africa) Iron ore.
Today, JSW is anticipating its first vessel carrying 169,585 MT Iron ore at Krishnapatnam port. The raw material is being imported at around USD 95/MT CFR from Kumba Iron ore mines in South Africa; vessel name is Eurydice D. In the second half of July, JSW Steel is anticipating Iron ore vessel from Canada, which is likely to carry more than 0.1 MnT Iron ore to Krishnapatnam port. Delivery from Canada takes not less than a month.
Indian Iron ore import duty is 2.5%. The raw material being imported may be used by JSW’s Salem (Tamil Nadu) Steel plant having 1 MnT pa capacity or Vijaynagar plant having 10 MnT pa steel making capacity. Total cost of transporting Iron ore fines from Krishnapatnam port to Salem Steel plant would cost at around INR 900-1,000/MT. And, Krishnapatnam port to Vijaynagar plant would cost around INR 1,000-1,100/MT.
Imports option cropped up after the Supreme Court ordered suspension of mining operations for 10 merchant mines in Odisha, which produced 19.1 MnT Iron ore in FY14. To add on, Karnataka mining is improving at a slow pace and Goa may resume operations Q3 FY15 onward.
In Goa’s 3rd e-auction, the company has purchased 11,484 MT Iron ore fines (8,484 MT of Fe 59 & 3,000 MT of Fe 60) on 12 May, 2014. The floor & bid prices were at INR 1,830/MT (basic) and INR 1,970/MT (basic) respectively.
Appreciated INR against USD and stability in Chinese spot Iron ore fines prices supported imports. Imports for JSW are need based and an option for survival because of Iron ore shortfall in domestic market. It is not economical to import as of now owing to lower procurement cost in domestic market.
In Q1 FY15, JSW purchased 2.9 MnT Iron ore from Karnataka e-auctions. 1.0 MnT Iron ore was purchased from NMDC Bailadila mines in Chhattisgarh through railway movement. From Odisha based mines, 0.8 MnT Iron ore was procured.
India has already imported 0.14 MnT Iron ore from April to 1st week of July, 2014. 0.55 MnT Iron ore is yet to arrive at Paradip, Haldia & Krishnapatnam port by the end of this month.
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