Karnataka’s Iron Ore Sales at 1.89 MnT in Apr’16

1. Karnataka iron ore sales fell by 53% M-o-M
2. Iron ore prices increased sharply in Apr’16
3. JSW Steel procured 68% of the total iron ore sold in Apr’16

Karnataka iron ore sales fell by 53% M-o-M

Karnataka iron ore sales fell by 53% M-o-M in Apr’16 and were recorded at 1.89 MnT against 4.03 MnT in Mar’16. Out of 1.89 MnT iron ore sold in Apr’16, NMDC sold 1.03 MnT and sales by private miners amounted to 0.86 MnT.

Iron ore prices increased sharply in Apr’16

Sharp increase in Karnataka iron ore prices were seen in Apr’16. Rising imported scrap offers resisted steelmakers going for scrap and rather they shifted to domestic sponge iron. Thus, following NMDC price hike private miners also raised base prices in Apr’16 e-auctions.

1. NMDC: Bid prices for fines (Fe 60.2%) which were at INR 1,430 /MT in Mar’16 moved up to INR 1,655/MT in Apr’16. While those of lump (Fe 63%) which was at INR 1,748/MT in Mar’16 increased to INR 1,995/MT in Apr’16
2. Private Miners: For instance, bid prices for lump (Fe 60%) of Sesa Sterlite was at INR 1,300-1,552/MT in Apr’16 auctions which was at INR 900-1,385/MT in Mar’16 e-auctions.

Bid prices for fines (Fe 64%) offered by Vyasankere iron ore mines were at INR 1,760-              1,770/MT in Mar’16 which has increased to INR 2,165/MT in Apr’16.

JSW Steel procured 68% of the total iron ore sold in Apr’16

JSW Steel accounted for 68% (1.28 MnT) of total iron ore purchases in Apr’16 e-auctions. Followed by Gerdau Steel India and BMM Ispat who individually procured nearly 0.06 MnT.

Buyer-wise iron ore procurement in Apr’16 e-auctions

Qty in MT
Source: SteelMint Research, Karnataka DMG

On the backdrop of imported lump offers becoming dearer, west India based steel makers are seen sourcing iron ore from Karnataka e-auctions. In Apr’16, Jindal SAW procured 8,000 MT fines (Fe 65/64%) from Karnataka e-auctions at bid price of INR 2,165-2,215/MT.