India: Karnataka iron ore e-auction sales volumes dip in Apr'21

Karnataka has registered a decrease in its monthly e-auction sales volumes in Apr'21. The total allotted iron ore quantity in Apr '21 was recorded at 2.76 million tonnes (mn t) compared to 2.86 mn t in Mar'21. There was a marginal fall in sales volume amid end of financial year as majority of lots were booked towards fiscal year end. Also fresh production from mines takes roughly around 20-25 days for putting it up for auction, hence limited lots were put in Apr'21 auction.

JSW Steel's iron ore sourcing from Karnataka e-auctions down 15%: India's major private steel mill and also the largest buyer of Karnataka's auctioned iron ore decreased its iron ore purchases in Apr '21. Last month, JSW Steel had purchased around 1.47 mn t of iron ore from the Karnataka e-auctions against 1.72 mn t in Mar.

It was felt, since the steel major has started sourcing iron ore from its captive mines, it has decreased its puchases from the e-auctions.JSW Steel's production was ramped up as its 13 (9 in Karnataka & 4 in Odisha) captive iron ore mines turned operational in FY'21.

Out of the 1.47 mn t iron ore sourced by JSW from the e-auctions in Apr, NMDC supplied 0.60 mn t, down from 0.73 mn t in Mar , contributing around 41% of the total JSW sourcing.

Vedanta remained the second-largest iron ore supplier to JSW Steel at 0.29 mn t against 0.44 mn t in Mar.

Sales from NMDC fall 8% m-o-m: NMDC sold 0.97 mn t of iron ore via the Karnataka e-auctions in Apr, against 1.06 mn t in the previous month, (including production from the Donimalai mines). NMDC's Donimalai mines sold around 0.6 mn t last month.

Iron ore sales from Vedanta were recorded at 0.56 mn t in Apr, which were stable on a month-on-month (m-o-m) basis.

Buyer-wise allotted quantity in Apr'21 iron ore e-auctions

Qty in metric tonnes (t)
Source: GOK, DMG, SteelMint Research

Major highlights of Apr'21 Karnataka iron ore e-auctions:

1.Vedanta procured 200,000 t of iron ore, of which 176,000 t were iron ore fines (Fe 55.5-63.15) and 24,000 t were lumps (Fe 63.8%-64.93%).

2. Western India-based pellet maker Jindal SAW bought 40,000 t of iron ore lumps (Fe 63.17-64.93) from the Karnataka e-auctions at INR 6,247-6,740/t.

3. Rashtriya Ispat Nigam Limited, a public limited company, bought around 140,000 t of iron ore fines and lumps from the Karnataka e-auction from NMDC. Out of the total quantity, 40,000 t were fines (Fe 59-61.5%) and the balance 100,000 t were lumps of 61%-63% grades.

Outlook: It is expected that the sales for the month of May'21 to fall amid rise in prices by the miner and COVID-19 situation.