India: Karnataka's iron ore e-auction sales up over 40% m-o-m in Nov'24

• NMDC's iron ore volumes increased 32%
  
  
• Limited material availability drove higher sales
  
  

Iron ore e-auction sales volumes in Karnataka increased significantly by around 44% m-o-m to 1.4 million tonnes (t) in November, 2024 against 969,645 tonnes (t) in October, data maintained with BigMint shows. Of the total volume sold in the month under review, fines accounted for 770,800 t (up 63% m-o-m), while lumps constituted 600,100 t (up 21% m-o-m).

The increase in volumes may be attributed to a rise in offerings from miners, including those who returned after being absent last month. Additionally, the end of the extended monsoon, the festive atmosphere, and regional demand-supply dynamics contributed to heightened activity in the e-auctions, sources informed BigMint.

Miner-wise breakup - NMDC continues to top the charts

• National Mineral Development Corporation (NMDC), India's largest iron ore miner, sold around 960,000 t from Karnataka via auctions in November, a rise of 32% against 726,000 t in October. Of the total volumes sold, 604,000 t were fines (up 36% m-o-m) and 356,000 t were lumps (up 26% m-o-m). Notably, the miner emerged as the top auctioneer this month, too.
  
  
• Karnataka State Minerals Corporation Limited (KSMCL) emerged as the second-leading miner, selling around 144,000 t fines (up 380% m-o-m) and 52,000 t lumps (down 55% m-o-m). This took its total sales volume via e-auctions to 196,000 t in November. The increase was mainly due to the miner boosting its offered quantity, particularly fines, and the e-auctions seeing more active participation compared to the previous month, an official source informed BigMint.
  
  
• Sandur Manganese and Iron Ores (SMIORE) reported sales of 79,000 t of lumps and 8,000 t fines bringing its total sales volume to 87,000 t in November, a sharp hike of around 480% m-o-m from just 15,000 t sold in October. The increase was mainly driven by the miner's decision to offer fines and the higher volumes of lumps in the merchant market.
  
  
• Vedanta sold 84,000 t of iron ore lumps in November, a sharp 62% increase m-o-m as compared to the previous month.
  
  
• R Praveen Chandra sold around 15,400 t of lumps in November, down by around 20%, m-o-m. Notably, the miner chose not to offer iron ore fines through the e-auction and instead preferred to sell them via direct sales.
  
  
• Sri Kumaraswamy Mineral Exports Private Limited (SKMEPL) managed to sell only about 4,000 t of lumps, as the miner's e-auction failed to attract active participation. Consequently, the company shifted its focus to selling larger volumes through direct sales rather than e-auctions. In November, e-auction sales volumes dropped threefold, falling from 12,000 t in October.
  
  

E-auction prices rise m-o-m amid premium bids

The monthly weighted average e-auction prices of iron ore fines (Fe 60%) stood at INR 3,900/t ($46/t) and lumps (10-40 mm, Fe 63%) at INR 5,000/t ($59/t), an increase of INR 500/t ($6/t) and INR 600/t ($7/t), respectively. Prices are on ex-mines basis, excluding royalty, DMF, and NMET.

Outlook

Iron ore e-auction volumes are expected to remain firm in the near term, as miners have raised their offerings in the merchant market. Additionally, the tight supply of material in the Bellary region's domestic market, coupled with strong demand, is expected to drive sales volumes. This is supported by reports that few imported cargoes have been redirected to the region via Krishnapatnam port, according to vessel line-up data from BigMint and confirmation from market players.