India: Karnataka iron ore auction sales volumes surge before monsoon in May'24

• Restocking activities prior to monsoon season
  
  
• SMIORE emerges as the second-leading miner
  
  

Iron ore e-auction sales volumes in Karnataka recorded a significant rise of 67% m-o-m to 1.3 million tonnes (mnt) in May 2024 from 0.78 mnt in April 2024, as per BigMint data. Out of the total volume of iron ore sold via auctions, 828,000 tonnes (t) of fines, and 467,550 t of lumps were sold during the month.

In May 2024, iron ore auction volumes surged as steelmakers began restocking ahead of the upcoming monsoon season. In contrast, fewer auctions were scheduled in April due to the new environmental clearance (EC) for financial year 2025 (FY'25). Miners took some time to resume operations after the financial year ended in March 2024.

Auction sales record a significant hike in NMDC's auction - NMDC, India's top iron ore miner, auctioned 876,000 t from Karnataka in May 2024, a significant rise recorded m-o-m as compared with 472,000 t in April 2024. Out of the total volume of iron ore, 616,000 t of fines, and 260,000 t of lumps were sold during the month.

Other miners' iron ore sales via auction outcomes:

• SMIORE emerged as the second-leading miner by selling 232,000 t of iron ore in May 2024, recording a significant hike of 76% against 132,000 t of iron ore sales in April 2024.
  
  
• KSMCL sold 104,000 t of iron ore via auctions in May, 2024. However, sales recorded a fall of 19% against 127,998 t in April, 2024.
  
  
• Vedanta sold 48,000 t of iron ore sales in May 2024, increased by 20% as compared to 40,000 t in April, 2024.
  
  
• BKG Mining sold 24,000 t of iron ore sales in May 2024 and R Praveen Chandra sold 11,550 t iron ore sales in May 2024. Notably, these miners were not sold any quantity of iron ore via auctions in the previous month.
  
  

Iron ore prices head south m-o-m: The monthly weighted average prices of iron ore fines headed south m-o-m and Fe 63% lumps prices stayed supported m-o-m. Weighted average prices of Fe 60% fines fall by INR 650/t m-o-m to INR 3,700/t, and Fe 63% lumps remained stable at INR 4,850/t respectively. Prices are exclusive of taxes.

Outlook:

In the coming months, auction volumes are expected to be volatile as states approach the monsoon season and steelmakers complete their restocking. Any remaining restocking is likely to be completed this month.