Steel major Steel Authority of India Ltd (SAIL) managed to sell only 28,000 t of iron ore fines (Fe 60%) from its Rajhara mine in Chhattisgarh under the Bhilai Steel Plant (BSP) at auctions conducted in Jul’21, as per data maintained with SteelMint.
No auctions from Odisha
Total sales at auctions fell massively in Jul compared to over 550,000 t in Jun. This was primarily because no auctions were held from SAIL’s mines in Odisha in Jul that had collectively accounted for 336,000 t of iron ore sales at auctions held in Jun.
Administrative reshuffling in SAIL due to the transfer of the Odisha and Jharkhand mines of the state-owned steel company to the Rourkela and Bokaro steel plants after the dismantling of the company’s Raw Materials Division (RMD) came in the way of auctions being held from Odisha in Jul. However, auctions from the Odisha mines, now under the administrative control of the Rourkela Steel Plant (RSP), have resumed in full swing in Aug.
No bids for sub-grade ore
Another reason for iron ore sales falling sharply at auctions in Jul was the lack of buyers for sub-grade fines, as per SteelMint reports. About 48,000 t of iron ore tailings (Fe 51.11%) from the Dalli mines in Chhattisgarh was left unsold on 10 Jul, while 78,000 t of similar grade dump fines found no buyers at another auction held from the state on 20 Jul. Similarly, 104,000 t of fines and tailings of grades Fe 60.13%, Fe 52.52%, and Fe 51.11% from the mines under BSP offered at another auction on 30 Jul failed to fetch any response.
Iron ore sales through auctions stood at 1.12 mn t in Q1 FY’22, including 0.7 mn t of fresh fines and 0.4 mn t of sub-grade fines, SAIL declared at its recent quarterly earnings call.
Prices under pressure
Iron ore prices have come under temporary pressure on account of NMDC’s price cuts for two successive months coupled with Odisha merchant miners slashing offers. Sale of 28,000 t of Fe 60.02% grade fines had been concluded on 2 Jul from BSP for INR 6,380/t prior to NMDC reducing prices for Jul.
However, iron ore fines (Fe 62.5%) prices from Odisha have fallen by over INR 700-750/t at auctions in the second week of Aug in comparison with prices that prevailed in the last week of Jun, SteelMint data shows.
The ongoing monsoon lull in demand just after the gradual recovery from the second COVID-19 wave has kept prices subdued. SAIL expects domestic demand to gather momentum from Sept’21 onwards. Therefore, greater iron ore sales through auctions are expected in the coming days.
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