India: Karnataka iron ore e-auction sales rebound in Dec'21

Karnataka recorded a 97% m-o-m increase in its iron ore e-auction sales volumes in Dec'21. The total allotted iron ore quantity in December was 3.1 million tonnes (mn t) as against 1.57 mn t in November.

Softness in iron ore prices, increased number of auctions in December and active buying by JSW, pushed up total iron ore sales in last month's Karnataka auctions. PSU miner NMDC slashed iron ore prices by INR 400/tonne (t) for fines and INR 1,200-1,300/t for lumps from 8 Dec'21 for auction from its Karnataka mines.

JSW's iron ore sourcing from Karnataka auctions surge: Purchases by JSW Steel, the largest buyer at Karnataka's iron ore e-auctions, witnessed a sharp increase of 173% in December. JSW purchased around 1.81 mn t of iron ore from the Karnataka auctions last month against 0.6 mn t in November.

Out of 1.81 mn t sourced, NMDC supplied 0.62 mn t (a significant rise compared to 0.12 mn t in November), accounting for around 34% of JSW Steel's total sourcing.

Vedanta remained the second-largest iron ore supplier to JSW Steel at 0.78 mn t last month against 0.12 mn t in November.

Buyer-wise allotted quantities in Dec'21 iron ore e-auctions

Qty in tonnes (t)
Source: Karnataka state govt, DMG, SteelMint Research
All prices mentioned are basic, taxes extra

Sales from NMDC up m-o-m: NMDC sold 1.04 mn t of iron ore via the Karnataka e-auctions in December against 0.22 mn t in the previous month, (including volumes from the Donimalai mines). NMDC's Donimalai mines sold around 0.54 mn t in December. Iron ore sales from the other leading miner Vedanta was recorded at 0.81 mn t in December against 0.28 mn t in November.

Highlights of Dec'21 Karnataka iron ore e-auctions

• Vedanta procured 136,000 t of iron ore, of which 100,000 t were fines (Fe 55.5%-63.14%) and 36,000 t was lump ore (Fe 62.11%-65.76%).
  
  
• Western India-based Electrotherm booked 8,000 t of iron ore lumps (Fe 65%) at INR 5,000/t from Vyasankere Iron Ore Mines.