In H1 FY16, Karnataka iron ore e-auctions prices have been declining. Base prices of NMDC as well private miners offered in Karnataka e-auctions have witnessed downtrend since Apr’15.
NMDC’s lump (Fe 62%) prices have fallen by 18% and fines (Fe 60%) by 40% in H1 of FY16. In-line, private miners have also reduced iron ore lump (Fe 62%) prices by 6% and fines (Fe 60%) by 51% in the same time frame.
Steelmakers prefer private miners’ iron ore over NMDC in Sept’15 Karnataka e-auctions
NMDC and private miners aggressively offered their material in Karnataka e-auctions conducted in the month of Sept’15. Total 2.16 MnT iron ore was allotted from the auctions against 2.06 MnT in Aug’15.
Private miners sold 1.76 MnT and NMDC sold 0.39 MnT iron ore, out of the total allotted quantity i.e. 2.16 MnT (NMDC’s Donimalai sold 120,000 MT iron ore and Kumarswamy sold 278,000 MT).
Majority of lots receive flat bids in Sept’15
Although the bids received in the Karnataka e-auctions conducted in the month of Sept’15 remained flat, base price of the material offered in the e-auction was itself lesser than that of the base prices of the material offered in Aug’15.
NMDC: Bids received were flat for NMDC’s lumps. Base and bid prices for lumps (Fe 62) offered by NMDC stood at INR 2,020/MT. Similarly, base and bid prices for fines (Fe 61.2) were in the range of INR 1,199-1,197/MT.
Private miners: Base and bid prices for lumps (Fe 62.3) were in the range of INR 2,170 -2,205/MT. Base and bid prices for fines (Fe 60) were in the range of INR 1,054-10,66/MT.
Note: Prices mentioned above are basic excluding 15% royalty and 12% forest development tax.
Supplier-wise Allotted Quantity in Sept’15
| Supplier | Fines | Lumps | Sub Grade ROM | Grand Total |
| NMDC | 308,000 | 90,000 | – | 398,000 |
| Private Miners | 955,881 | 451,180 | 360,000 | 1,767,061 |
| Grand Total | 1,263,881 | 541,180 | 360,000 | 2,165,061 |
Quantity in MT
Source: Karnataka DMG
JSW Steel – The major iron ore buyer in Karnataka e-auctions
JSW Steel procured 1.1 MnT iron ore (260,000 MT lumps and 844,000 MT fines) from Karnataka’s e-auctions conducted in the month of Sept’15. The company procured 328,000 MT iron from NMDC and 776,000 MT from private miners in Sept’15.
In Q1 FY16, the company procured 4.73 MnT iron ore from Karnataka e-auctions.
Bidder-wise Allotted Quantity in Sept’15
| Company | Fines | Lumps | Sub Grade ROM | Grand Total |
| JSW Steel | 844,000 | 260,000 | – | 1,104,000 |
| BMM Ispat | 176,000 | 8,000 | 360,000 | 544,000 |
| Kirloskar Ferrous Industries | 35,879 | 23,180 | – | 59,059 |
| Others | 208,002 | 250,000 | 458,002 | |
| Grand Total | 1,263,881 | 541,180 | 360,000 | 2,165,061 |
Quantity in MT
Source: Karnataka DMG
Note: Grade & prices mentioned above are weighted average.
Karnataka’s iron ore prices fall by upto 50% since Sept’13
Bid price of iron ore fines (Fe 60% weighted average) offered in Karnataka’s iron ore e-auctions have fallen by 50% during past 2 years.In similar lines, bid prices for lumps (Fe 63%) have fallen by 35% since Sept’13.
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