Major Sponge Plants Significantly Increased Iron Ore Sourcing in Sept'16
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India's 12 major sponge iron plants raised iron ore sourcing by 24% M-o-M from 2.46 MnT in Aug'16 to 3.06 MnT in Sept'16.
India's sponge iron capacity is 47 MnT in FY16 out of which top sponge makers contribute the major part in India's sponge iron production. SteelMint has tried to analyze iron ore sourcing pattern of India's major sponge producers whose combined share is about 35% of India's total sponge production capacity.
Essar Steel's iron ore sourcing moved up by 15% M-o-M in Sept'16. The company sourced 2.94 MnT iron ore in Q2 FY17 compared to 2.59 MnT in Q1 FY17. The steel maker relied more on domestic sources for iron ore procurement than on imports and sourced 2.8 MnT iron ore from domestic market (NMDC Chhattisgarh and Odisha merchant mines).
Jindal Steel & Power raised its iron ore procurement by 13% M-o-M in Sept'16 however on quarterly basis its procurement remained mostly stable. The company is actively participating in pellet exports and exported 0.7 MnT pellets in Q2 FY17 against 0.45 MnT in Q1 FY17.
West Bengal based Rashmi Metaliks, doubled its iron ore sourcing in Sept'16. However its sourcing moved up significantly from 0.48 MnT in Q1 FY17 to 0.89 MnT in Q2 FY17. Apart from supplying pellets in domestic market, it also exported 0.22 MnT pellets in Q2 FY17 which was nil in Q1 FY17.
Iron ore sourcing of other major sponge makers in Sept'16 was follows: Shyam group - 0..25 MnT (doubled on monthly premises), Usha Martin - 0.1 MnT (down by 9% M-o-M) and Monnet Ispat & Energy - 0.06 MnT (up by 20% M-o-M).
12 major sponge plants iron ore sourcing in H1 FY17
| Plant Name | Apr'16 | May'16 | Jun'16 | Jul'16 | Aug'16 | Sept'16 | Total |
| Essar Steel | 0.92 | 0.83 | 0.84 | 0.88 | 0.96 | 1.1 | 5.53 |
| Jindal Steel & Power | 0.64 | 0.77 | 0.76 | 0.63 | 0.72 | 0.81 | 4.33 |
| Rashmi Metaliks | 0.17 | 0.18 | 0.13 | 0.23 | 0.22 | 0.44 | 1.37 |
| Shyam Group | 0.17 | 0.08 | 0.14 | 0.12 | 0.12 | 0.25 | 0.88 |
| Usha Martin | 0.14 | 0.14 | 0.14 | 0.1 | 0.11 | 0.1 | 0.73 |
| Monnet Ispat & Energy | 0.16 | 0.21 | 0.06 | 0.07 | 0.05 | 0.06 | 0.61 |
| BMM Ispat | 0.06 | 0.11 | 0.11 | 0.11 | 0.09 | 0.09 | 0.57 |
| Rungta Mines | 0.11 | 0.11 | 0.11 | - | 0.06 | 0.05 | 0.44 |
| Prakash Industries | 0.07 | 0.07 | 0.07 | 0.06 | 0.07 | 0.06 | 0.4 |
| Adhunik Group | 0.09 | 0.07 | 0.06 | 0.08 | 0.03 | 0.04 | 0.37 |
| Sarda Energy & Minerals | 0.07 | 0.05 | - | 0.03 | 0.02 | 0.03 | 0.21 |
| Godawari Power & Ispat | 0.02 | 0.02 | - | - | 0.01 | 0.03 | 0.08 |
| Grand Total | 2.6 | 2.63 | 2.42 | 2.31 | 2.46 | 3.06 | 15.5 |
*It does not include procurement from their respective captive mines
Qty in MnT
Provisional Data
Source: SteelMint Research
Sponge iron prices experienced sharp hike in Sept'16 - Throughout the month of Sept'16, sponge iron prices moved up sharply amid lesser production over monsoons and expensive coal prices. Also, Odisha based merchant miners started increasing iron ore prices since mid-Sept'16 which continued till 1st week of Oct'16. Odisha miners raised lump prices by INR 600-750/MT M-o-M and fines prices by INR 100-200/MT M-o-M in three tranches since mid of Sept'16.
Comparing on monthly average basis, C-DRI monthly price hike across major markets were as follows : Bellary (+ INR 1,650/MT), Raipur (+ INR 1,700/MT), Rourkela (+ INR 1,600/MT) and in Durgapur (+ INR 950/MT).
