India: NMDC's iron ore rake movements from Chhattisgarh fall 9% m-o-m in Feb'24

In February 2024, the National Mineral Development Corporation (NMDC), India's largest iron ore miner, shipped 477 rakes, equivalent to 1.84 million tonnes (mnt) of iron ore from Chhattisgarh. This denotes a 9% decrease compared to the 526 rakes (2.02 mnt) recorded in January. Notably, reduction in rake movement is due to the steel players having sufficient inventory and fall in steel prices. The data, sourced from BigMint, encompasses movements within Chhattisgarh and to other state-based units, excluding supply to AM/NS India through the slurry pipeline. It's worth noting that each rake carries 3,850 t of iron ore.

Sourcing by other state-based units lowers rake movements:

Rashtriya Ispat Nigam Ltd (RINL) emerged as the top buyer, but it experienced a 21% decrease in iron ore rake receipts from NMDC Chhattisgarh. In February, RINL received 138 rakes compared to 176 in January.

JSW Steel recorded 106 iron ore rakes in February, a slight drop as compared with 109 rakes in January.

NMDC's supplies to it's Nagarnar plant decreased in February, at 59 rakes compared to 61 in January.

Kudremukh Iron Ore Company Limited (KIOCL), a southern India-based pellet maker, witnessed a significant 20% decrease in sourcing, receiving 48 rakes in February compared to 60 in January. KIOCL has suspended operations at its 3.5 mnt/year pellet plant in Mangalore w.e.f 24 February 2024. The suspension was undertaken amid the ongoing downward trend in the pellets market.

However, JSPL significantly increased its iron ore rake bookings from NMDC, at 21 in February, compared to just 6 in January. Notably the steel-maker commissioned operations at its hot strip mill 1 at Angul.

Overall, NMDC's total iron ore rake movements to plants outside Chhattisgarh reached 415 in February, reflecting an 11% decrease from the 468 recorded in January.

Sourcing by Chhattisgarh-based units increases: NMDC's number of rakes for carrying iron ore to Chhattisgarh-based units totalled 62 (0.24 million tonnes) in February, marking a 7% rise from the 58 (0.22 mnt) recorded in January. Chhattisgarh-based players were seen preferring iron ore over pellets in February as deals recorded by BigMint fell to around 91,000t in February 2024 against 130,000t in January 2024.

Additionally, NMDC Chhattisgarh did not revise its iron ore prices in the month of February. In addition, the last price revision was executed in January, with prices of DR-CLO going up by INR 300/t and fines by INR 400/t, effective from 24 January, 2024.