JSW Steel, India’s leading steelmaker, procures iron ore majorly from Odisha, Karnataka, Chhattisgarh, Jharkhand, Goa including through imports. The steelmaker produced 8.51 MnT crude steel during Apr-Nov’15 in FY16 and total 12.63 MT crude steel in FY15.
JSW Steel’s iron ore sourcing rose by 10% Q-o-Q in Q3 FY16. In Q3 FY16, the company procured 5.7 MnT of iron ore. Out of the total sourced quantity, the largest share (90%) was from Karnataka e-auctions, followed by procurement from NMDC CG mines (6%). The remaining quantity of iron ore was brought from Goa e- auctions and imports.
Apparently, the major reason for increase in procurement is that the company aims to raise its crude steel production of JSW Steel, Dolvi plant from 3.3 MnT to 5 MnT pa, which is likely to be completed by end of this year. Also, the use of high grade iron ore will further enhance efficiency of its steel plant.
Unlike Q2 FY16, JSW Steel has increased its iron ore purchases in Q3 FY16 to attain its crude steel production target.
In Dec’15, the steelmaker procured 1.70 MnT iron ore from Karnakata e-auctions, 0.05 MnT from Goa e-auctions and procurement from Chhattisgarh, Odisha and Jharkhand remained nill.
Quantity in MnT
Provisional Data
Source: SteelMint, Customs, DMG, Railways
The steelmaker imported 0.14 MnT high grade concentrate ore (Fe 67%) from Brazil in Nov’15 after a gap of two months. This ore had been used for Dolvi plant. Unavailability of high grade concentrate in India has led the steelmaker to opt for imports in Q3 FY16.
Iron ore purchases from Karnataka also increased by 22% Q-o-Q in FY16. This was due to iron ore offered in Karnataka e-auctions (by NMDC and private miners) at cheaper base price as compared to other states Also, availability of low grade ore at much feasible price in Karnataka e-auctions have attracted JSW Steel to procure more from Karnataka e-auctions.
Steelmaker resumed iron ore purchases from Goa e-auctions after a span of 1 year in Dec’15. It had last participated in the Goa e-auctions in the month of Nov’14 and procured 50,000 MT fines (Fe 64%) located at Vedanta’s Codli mines.
Procurement of iron ore from NMDC significantly dropped down. It was 0.72 MnT in Q2 and 0.35 MnT in Q3 FY16. Purchases from Odisha and Jharkhand continued to remain nil throughout Q3 FY16.
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