Buyers shun iron ore lumps in India Karnataka state auctions
Singapore (Platts)--20Dec2012/540 am EST/1040 GMT
Demand for iron ore lumps and calibrated lump ore in electronic auction
sales in India's southern state of Karnataka has remained lackluster in the
past few months as buyers turn to lower-grade fines to meet their needs, data
from the state's mines ministry showed Thursday.
Indian state-owned miner NMDC Ltd. sold only 4,000 mt, at Rupees
4,702/mt ($85.9/mt), of 100,000 mt of 64% Fe CLO it offered at auction
Wednesday, the data showed.
About 60,000 mt of NMDC's iron ore lumps with 63.23-63.51% Fe content
were also up for sale. Of this volume, about 20,000 mt found no takers.
Of all the iron ore fines stocks on offer, about 280,000 mt were
purchased. JSW Steel acquired 204,000 mt, or more than 70% of the total, data
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Bid prices successfully posted by the steelmaker ranged from Rupees
2,285/mt ($41.7/mt) for 28,000 mt of 63% Fe fines from NMDC's Kumaraswamy
mine to about Rupees 2,016/mt ($36.8/mt) for 20,000 mt of 59.16% Fe fines
from the miner's Donimalai mine.
Barring supplies from NMDC, iron ore stocks available at other mineheads
in the state are also being offered in the auction sales but these are of
much lower grades.
For instance, in an auction Tuesday bidders purchased about 384,000 mt
of low-grade iron ore fines and run-of-mine with Fe content averaging 45% and
Among other bids, JSW Steel purchased about 184,000 mt of fines with 40%
Fe and lower at about Rupees 300/mt ($5.5/mt) on Tuesday.
"Steelmakers do not have a choice," a Karnataka-based iron ore miner
said. "They are grabbing whatever ore they can get."
As reported, dwindling iron ore supplies and delays in the restart of
mining operations continue to pressure steelmakers and sponge iron producers
dependent on ore supplies from the state. Buyers have previously said that
barring supplies from NMDC, ore stocks being auctioned are of inferior
quality, with low Fe content and high levels of alumina and silica.
All prices are on an ex-mine or ex-stockyard basis. A 10% royalty, 5.5%
VAT, and 12% forest development tax are extra.
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