Steel mills in Karnataka have expressed concern over a steep rise in iron-ore prices at last week's e-auctions in Karnataka. The steel mills, which have no alternative for sourcing raw material, are staying back from the auctions or buying very little just to keep their furnaces running.
A Supreme Court-appointed monitoring committee, which is overseeing the conduct of electronic auctions of iron ore in the state, had fixed the base price at Rs 2,300 per tonne for the latest auctions. This is double, when compared to the international prices in the Chinese market. Yet, this is lower by 15 per cent over the previous auctions when the base price was fixed at Rs 2,700 per tonne.
The prices of iron ore sold at the e-auctions in Karnataka are around 80 per cent more than the spot prices in the Chinese market. “This is uneconomical for mills to run their plants,†Nowal commented. Currently, JSW Steel is operating its plant at an “unviable†50 per cent of the installed capacity.
During the auctions held on Thursday and Friday, only 58 per cent of the total 2.25 million tonnes of iron ore released was sold, while there were no takers for the remaining 950,000 tonnes. While, JSW Steel picked up 926,000 tonnes, BMM Ispat bought about 144,000 tonnes. The rest was picked up by Kalyani Steel and MSPL among others.
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