India: Sales in Karnataka iron ore e-auctions recover m-o-m in Jun'23

Karnataka iron ore e-auctions sales volumes recovered by 48% m-o-m to 1.83 million tonnes (mnt) in June 2023 from 1.24 mnt in May, as per SteelMint data. Out of the total material sold in June, 1.13 mnt were fines and 0.69 mnt lumps.

In May, fewer auctions were notified in Karnataka, while some auctions got postponed or received poor response due to weak market sentiment. However, with the improved number of auctions in June and lower iron ore inventories with mills, the sales volumes have recovered. NMDC has increased its supply this month, which has impacted the sales of iron ore in Karnataka.

Tight availability of iron ore, pushed up pellet offers in southern India. SteelMint's pellet index for Bellary increased by INR 200/t m-o-m to stand at INR 9,900/t in Jun'23 against INR 9,700/t in May'23.

Auction highlights :

NMDC's sales significant rise in June - NMDC, India's top iron ore miner, auctioned 1.65 mnt of material from Karnataka in June, jumps 107% m-o-m against 799,000 t in May. Total iron ore fines sold was 1.03 mnt while 620,000 t of lump ore were sold during the month.

SMIORE emerged as the second leading miner by selling 88,000 t of iron ore via auctions in June, drops 60.7% as against 224,000 t in May.

Vedanta's iron ore volumes decreased by 41% m-o-m to 40,000 t in June from 68,000 t in May.

Other miners like R Praveen Chandra , SKMEPL, VESCO mark its presence by selling few quantity of iron ore from its mines as 22,000 t, 20,000 t and 8,000 t respectively.

Miner-wise auctions in Karnataka

Iron ore fines and lumps prices fall m-o-m: The monthly weighted average price of iron ore fines and lumps fell m-o-m by INR 400/t and INR 300/t respectively. Price of Fe 60% fines stood at INR 2,600/t and Fe 63% lumps were recorded at INR 3,150/t ex-mines, excluding taxes.

Outlook: Iron ore availability in Karnataka's merchant market is likely to remain restricted in July which are likely to keep pellet prices supported. With a lesser number of fines offered in auctions, private miners are less likely to lower offers.