From its Kumarswamy mines located in the state of Karnataka, NMDC offered a total of 180,000 MT Iron ore through e-auction on May 21.
Details of quantity offered:
Iron ore Calibrated lump 120,000 MT
Iron ore fines 56,000 MT
Low grade Iron ore fines 4,000 MT
Number of bidders and winners were 4 each; only 8 bids were received in total, which shows that only limited number of Karnataka based steel producers are willing to make purchases.
Fines was sold out in total; only 7% of total lumps offered was purchased by a single party.
Details of quantity sold:
8,000 MT Iron ore Calibrated lump Fe 63 at Rs 3,892/MT – Minera Steel
28,000 MT Iron ore fines Fe 61 at Rs 2,035/MT – JSW 20,000 MT and Xindia 8,000 MT
4,000 MT Low grade iron ore fines Fe 58 at Rs 1,660/MT – BMM
28,000 MT Iron ore fines Fe 62 (Floor price Rs 2,160/MT)
– JSW 24,000 MT at Rs 2,190/MT and Xindia 4,000 MT 2,180/MT (Xindia had bid for 8,000 MT)
Apart from Fe 62 fines booked at prices higher by only about a percent, the entire quantity of raw material was booked at prices equal to the set floor price.
Steelmakers located in Karnataka, in the month of May, have been quite uninterested to use lumps, on similar grounds stated in previous e-auctions which ultimately results in poor margins i.e. the cost factor (most importantly), inferior quality, less quantity available and low tumbler index that needs higher fines generation.
JSW, Xindia and BMM procured fines due to beneficiation and Pellet making facilities available.
Royalty 10%, VAT 5.5% (on auction price and royalty), are applicable.
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