India: Karnataka iron ore e-auction sales stable m-o-m in Feb

Karnataka's iron ore e-auction sales volumes remained stable m-o-m in Feb'22. The total allotted iron ore quantity in this month was 3.13 million tonnes (mnt) compared to January's 3.09 mnt.

A higher number of auctions resulted in greater allocations of iron ore in February. Pellet prices in Karnataka rose last month. SteelMint's price index for Bellary rose by INR 300-400/tonne (t) m-o-m in February. Notably, SteelMint recorded pellet trade volumes of around 46,500 t in February against 86,000 t in January.

JSW's iron ore sourcing from Karnataka auctions increases: Purchases by JSW Steel, the largest buyer from Karnataka's iron ore e-auctions, increased by 4% in February. The company purchased around 1.64 mnt of iron ore from the Karnataka auctions last month against 1.57 mnt in January.

Out of the total volume, NMDC supplied 0.79 mnt (a significant rise compared to 0.75 mnt in January), accounting for around 48% of JSW Steel's total sourcing.

Vedanta remained the second-largest iron ore supplier to JSW Steel at 0.292 mnt last month, a drop against 0.36 mnt in January.

Buyer-wise allotted quantities in Feb'22 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 drop m-o-m: NMDC sold 1.22 mnt of iron ore via the Karnataka e-auctions in February against 1.35 mnt in the previous month, (including volumes from the Donimalai mines). NMDC's Donimalai mines sold around 0.6 mnt in February. Iron ore sales from the other leading miner, Vedanta, was recorded at 0.55 mnt in February against 0.52 mnt in January.

Highlights of Feb'22 Karnataka iron ore e-auctions

• Vedanta procured 176,000 t of iron ore, of which 128,000 t were fines (Fe 57.5%-63.6%) and 48,000 t were lump ore (Fe 63.29%-64.88%).
  
  
• Eastern India-based Electrosteel Castings Limited booked 12,000 t of lumps (Fe 64.88%) from P Balasubba Setty in the Karnataka auctions at INR 5,300/t.
  
  
• Gujarat-based SAL Steel procured 4,000 t of fines (Fe 65%) from Vyasankere mines at INR 5,300/t.