What does Bhushan Steel's Iron Ore Sourcing Pattern Indicate?
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Bhushan steel ltd is India's one of the largest steel manufacturer with an annual production capacity of 5.6 MnT. Company has been in the news for after global steel giant ArcelorMittal has evinced interest in buying Bhushan steel, which has been referred by the Reserve Bank of India for liquidation under the Insolvency and Bankruptcy Code (IBC).
Bhushan Steel has a significant presence in auto steel categories with a 5.6 MnT integrated steel unit, including a cold rolled facility, in Odisha.
In this report we tried to understand the iron ore sourcing pattern of Bhushan steel ltd, based on data collated by SteelMint from different authentic sources, which includes movement through railways and to a certain extent from road.
Bhushan steel is located in Angul district of Odisha and sources most of its iron ore from Odisha based miners and pellet manufacturers.
According to the data following inferences can be made
1. Iron ore movement has been quite consistent during Jan-Sep'17 as compared to similar period last year. Company sourced 3.85 MnT in first nine months of 2017, against 3.75 MnT in 2016 during same period.
2. Company sourced 0.36 MnT of pellets during Jan-Sep'17, which was 0.46 MnT in Jan-Sep'16 and 0.67 MnT in 2016.
3. Considering 1.6 MT iron ore required to make 1 MT of crude steel, company would have produced roughly 3.5 MnT steel in 2016 and 2.6 MnT in 2017 (Till Sep). This means crude steel production has been stable.
Bhushan Steel Iron Ore & Pellet Sourcing
| Seller | 2015 | 2016 | 2016 (Till Sep) | 2017 (Till Sep) |
| Iron Ore Sourcing | ||||
| Serajuddin | 0.72 | 0.12 | 0.08 | 1.16 |
| Indrani Patnaik | 0.79 | 2.12 | 1.39 | 0.98 |
| Rungta Mines | 2.37 | 1.25 | 1.03 | 0.57 |
| OMC | 0.38 | 0.94 | 0.71 | 0.44 |
| KJS Ahluwalia | 0.00 | 0.13 | 0.02 | 0.21 |
| Mid East Integrated Steel | 0.00 | 0.06 | 0.02 | 0.20 |
| SN Mohanty | 0.04 | 0.18 | 0.13 | 0.13 |
| Essel Mining | 0.08 | 0.22 | 0.19 | 0.06 |
| Others | 0.00 | 0.18 | 0.18 | 0.11 |
| Total (A) | 4.39 | 5.18 | 3.75 | 3.85 |
| Pellet Sourcing | ||||
| Jindal Steel & Power Ltd | 0.04 | 0.52 | 0.33 | 0.34 |
| Arya Iron & Steel Ltd | - | 0.01 | - | 0.02 |
| Others | 0.21 | 0.14 | 0.13 | - |
| Total (B) | 0.25 | 0.67 | 0.46 | 0.36 |
| Grand Total (A+B) | 4.64 | 5.85 | 4.21 | 4.21 |
Quantity in MnT
Source: SteelMint
