India: NMDC's iron ore rake movement from Chhattisgarh falls by 18% m-o-m in Apr'23

India's largest iron ore miner National Mineral Development Corporation (NMDC) dispatched 453 (1.74 mnt) iron ore rakes from Chhattisgarh in April 2023, down 18% as against 554 rakes (2.13 mnt) in March 2023, according to the rake movement data maintained with SteelMint.

This figure includes movements within Chhattisgarh and to other state-based units but excludes supply to AM/NS India through the slurry pipeline. Notably, a rake carries 3,850 tonnes (t) of iron ore.

JSW top buyer, however, sourcing falls: JSW Steel emerged as the largest buyer, with 168 iron ore rakes received in April, down 9% as against 185 recorded in March 2023. Ex-Mumbai trade-level HRC prices inched down by 0.5% m-o-m in April to INR 59,930/t (INR 60,260/t). Competitive landed offers offers of HRCs to India, lower deals in the trade segment and dullness in the HRC export market have continued to weigh on domestic prices in India. This impacted JSW's iron ore sourcing.

Rashtriya Ispat Nigam Ltd (RINL) recorded a 36% decrease in receipt of iron ore rakes from NMDC Chhattisgarh at 130 in April compared to 203 in March. The ex-Mumbai BF-grade rebar prices fell 3% m-o-m to INR 59,450/t (INR 61,050/t) in April. Lack of demand support from the projects segment kept longs prices under pressure, coupled with lack of liquidity.

Last month the companies like JSW and RINL have increased their procurement, thus, rake movement also increased but this month they are expecting a price cut in iron ore. Also, NMDC had raised prices of fines by INR 200/t and left lump prices unchanged, effective from 21 March.

South India-based pellet maker Kudremukh Iron Ore Company Limited's sourcing stood at 58 rakes in April, slightly down compared with 60 rakes in March. India's pellet export sentiments remained subdued due to a fall in prices and preference for low-grade ore by Chinese mills on falling steel margins.

NMDC's total iron ore rake movements to plants based outside Chhattisgarh were recorded at 408 last month, down 19% compared to 505 in March.

Sourcing by Chhattisgarh-based units decreases: NMDC's iron ore rake movements to Chhattisgarh-based units were recorded at 45 in April, down 8% m-o-m compared to 49 in March. A fall in sponge iron prices amidst subdued long steel demand weighed on iron ore sourcing.

Movement for exports remains nil - NMDC's iron ore rake movement for exports remained nil last month. However, in its investor call, the company's officials had mentioned that with export opportunity opening up amid strong demand from China, there is a possibility of starting dispatches of low grade ore from Vizag Port.