India: Karnataka iron ore e-auction sales hit seven-month high in July

Karnataka's monthly iron ore e-auction sales volume increased by 12% m-o-m in Jul'20. Total allotted quantity in Jul'20 was at 3.13 mn t compared to 2.79 mn t in Jun'20. Iron ore e-auction sales increased to a 7-month high in Jul'20 as similar figures were seen in Dec'19 at 3.6 mn t.

Higher capacity utilization and an increase in product prices resulted in the active booking of ore by mills. Iron ore prices have increased across India on the back of tight supply of high-grade ore. NMDC increased base prices for the Jul'20 Karnataka auctions.

JSW steel increased iron ore sourcing by 8%: India's major private steel mill and also the largest buyer of Karnataka iron ore bought 54% to the total iron ore sold in Karnataka e-auction last month. In the month of Jul'20 JSW sourced around 1.68 mn t iron ore, up by 8% against 1.55 mn t in the month of Jun'20. JSW Steel's average capacity utilization increased to 83% in Jul'20 compared to 76% in Jun'20.

Out of 1.68 mn t iron ore sourced by JSW in Jul'20, NMDC supplied 0.6 mn t, up by 3% against 0.58 mn t last month, contributing around 36% of total JSW sourcing.
Vedanta remained the second-largest iron ore supplier to JSW Steel, with 0.5 mn t sales in Jul'20 against 0.35 mn t in Jun'20.

Other suppliers to JSW Steel were Ramanadurga Iron Ore Mine at 0.17 mn t, Karnataka State Minerals Corporation Ltd at 0.13 mn t and others at 0.29 mn t.

NMDC sales up - NMDC sold 0.79 mn t iron ore via Karnataka e-auctions in Jul' 20, up by 7% from 0.74mn t in Jun'20. With operations remaining on hold in Donimalai, all the sales made were from its Kumaraswamy mines.

Vedanta Ltd was the second-largest seller in Karnataka iron ore e-auctions at 0.57 mn t in Jul'20 against 0.46 mn t in Jun'20.

Buyer-wise allotted quantity of Jul'20 iron ore e-auctions:Qty in t
Source: GOK, DMG, SteelMint Research

Some other highlights of Jul'20 Karnataka iron ore e-auctions-:

• Vedanta procured 24,000 t iron ore from Karnataka e-auction, out of which iron ore lumps (Fe 62.19 - 64.22%) was 16,000 t and 8,000 t fines (Fe 58.25%) in July.
  
  
• Western India based pellet maker - Jindal SAW bought 28,000 t iron ore fines (Fe 61.44-63%) from P.Balasubba Setty at INR 2,020 - 2,300/t in from Karnataka e-auction in Jul'20.
  
  
• NMDC Limited - the public limited company bought 16,000 t iron ore fines ( Fe 61.5%) from its Kumarswamy mines via e-auction at INR 1,832/t (Basic, Royalty, DMF, and NMET Extra).