Category Archives: Fines/Lumps

China: Iron ore, steel futures slide on weak demand

Iron ore and steel futures on Chinese exchanges fell by 2.3% and 1.5% respectively in today’s trading session as demand continued to remain weak on output cuts notwithstanding improving steel margins. Closing prices of the most-active iron ore and steel futures contracts on 27 Jul’21:

  • DCE iron ore futures Sept contract closed at RMB 1,109.5/t ($170) (-RMB 27)
  • SGX iron ore futures Aug contract closed at $197.50/t (-1.5)
  • SHFE rebar futures Oct contract closed at RMB 5,613/t ($862) (-RMB 74)
  • SHFE HRC futures Oct contract closed at RMB 5,896/t ($906) (-RMB 94)
 
India: OMC to auction nearly 687,000 t of iron ore lumps on 31 Jul'21

India: OMC to auction 687,000 t of iron ore lumps on 31 Jul’21

State-owned Odisha Mining Corporation (OMC) has scheduled an e-auction for iron ore lumps on 31 Jul’21. The auction is being conducted for 687,000 t of material. The base price has been increased by up to INR 2,860/t as against the price at the last e-auction on 2 Jun.

However, the base price remains lower by around INR 1,000/t against the bid price at the last the e-auction.

SteelMint’s index for Odisha iron ore lumps (5-18 mm, Fe 63%) stood at around INR 14,250/t (inclusive of royalty, DMF and NMET) on 24 Jul.

With 13.3 mn t of iron ore production in FY’21, OMC had emerged as the leading merchant miner in Odisha. The state PSU miner could also become the largest iron ore producer in Odisha with a consolidated capacity of 34 mn t/year, as per SteelMint estimates, especially after it bagged key iron ore mines following months of non-production subsequent to the Odisha auctions in 2020.

OMC reserves about 30% of its annual production for auctions, with the rest earmarked for long-term linkage customers.

At the last iron ore e-auction conducted by the miner on 2 Jul for 619,000 t of iron ore lumps, the bids received hit record-high levels and were booked at an average price of 42.8% over the set base price.

Moreover, the miner had held an auction for 689,000 t of iron ore fines on 22 Jul, after reducing the total material on offer and increasing the base price by INR 2,550/t compared with the previous e-auction on 8 Jul’21.

 
China: Iron ore futures rebound on improved steel margins

China: Iron ore futures rebound on improved steel margins

Dalian iron ore futures on 26 Jul’21 picked up by 1.1% d-o-d with improvement in Chinese steel margins. Steel futures remained supported by positive sentiments, moving up by 0.2% as against the last trading session on 23 Jul. Closing prices of the most-traded ferrous futures contracts are:

  • DCE iron ore futures Sept contract closed at RMB 1,136.5/t ($175) (+12.5)
  • SGX iron ore futures Aug contract closed at $198.15/t (+0.65)
  • SHFE rebar futures Oct contract closed at RMB 5,687/t ($877) (+RMB 16)
  • SHFE HRC futures Oct contract closed at RMB 5,990/t ($924) (+RMB 22)
 

Global iron ore and pellet export shipments up 5% in Jun’21

The world’s cumulative iron ore and pellet export shipments for Jun’21 were recorded at 132.8 mn t, registering an increase of 5% m-o-m as compared to 127 mn t in May, according to data maintained with SteelMint.

  • Australia remained the top exporter at 75.4 mn t vis-a-vis 74.6 mn t in May.
  • Other major exporters were Brazil and South Africa at 33.7 mn t and 5.4 mn t respectively.
 
India's iron ore production

India’s iron ore production expected to reach 245-255 mn t in FY’22 – SteelMint

Thanks to anticipated capacity enhancements by both private and state-owned miners, India’s iron ore production is projected to increase to 245-255 mn t in FY’22 from around  205 mn t in FY’21, SteelMint data reveals.

Growth in Odisha production

Output from India’s leading iron ore producing state, Odisha, is anticipated to rise to 137.8 mn t in 2021-2022, from 108 mn t in FY’21. Odisha’s production had touched 145 mn t in FY’20 on increased output by miners ahead of impending expiry of leases in Mar’20.

However, SteelMint calculations don’t factor in likely additional production that could result from operationalisation of leases towards the latter half of the year following the latest round of auctions of iron ore blocks by the state government.

Production is estimated to inch up due mainly to a projected 85% growth in output by state-run PSU miner Odisha Mining Corporation (OMC) to 24.5 mn t in this fiscal as against 13.26 mn t in FY’21. OMC’s Daitari iron ore mine has received necessary government approval to increase its EC limit from 3 mn t to 6 mn t/year. Earlier, OMC had sought approval for expanding the capacity of its Jilling-Langalota mine in Odisha’s Keonjhar district from 6.28 mn t to 10 mn t/year.

The leading merchant miner has plans to increase the capacity of the Guali iron ore mine to 30 mn t/year. Both Jilling and Guali were added to OMC’s kitty in 2020 following months of non-production after the Odisha auctions. SteelMint has reported that OMC’s Kurmitar Pahar iron ore mine has been granted permission for EC expansion from 2.4 mn t to 6 mn t/ year. OMC has also placed a proposal for increasing the production capacity of the Gandhamrdan A iron ore block from 0.35 mn t to 2.5 mn t/year.

Moreover, OMC’s Khandbandh, Banspani, Mahaparbat and Dubna-Sakradihi mines are expected to commence production this fiscal with expected combined output being pegged at 0.6 mn t.

India iron ore production

Steel majors to augment iron ore output

OMC apart, AM/NS India is projected to add another 2.08 mn t of iron ore from its 7.16 mn t/year Gorumahisani-Sagasahi block, which is slated to commence production from Aug’21. The steel major’s FY’22 production is likely to stand at around 5.59 mn t, up from 4.12 mn t in FY’21, taking into reckoning production from the company’s Thakurani block.

Tata Steel and state-owned SAIL are expected to record iron ore output at 27.36 mn t and 14.46 mn t respectively in FY’22. Higher production is expected to result from Tata Steel’s efforts to increase the capacity of the Joda East iron ore mine from 12 mn t to 19.5 mn t. SAIL, on the other hand, is gearing up to enhance production from the Barsua-Kalta-Taldih mines to 16 mn t from about 8 mn t.

Steel behemoth JSW Steel, too, is expected to enhance its total iron ore yield by 22% from 16.67 mn t in the preceding fiscal on plans to augment capacity. However, steep premiums and “legacy issues” could force the company to surrender the Jajang and Gonua mines to the state government, as per an exclusive SteelMint report. While Jajang produced 7.19 mn t in FY’21, Gonua churned out 0.77 mn t.

Increased volumes from merchant miners

Major merchant producer Serajuddin & Co. is expected to produce around 9.8 mn t this fiscal as against just 3.65 mn t in FY’21 from its 15.5 mn t/year Balda iron ore block. Serajuddin’s production slipped sharply in FY’21 on account of delayed resumption of operations post auctions. As per latest reports, the miner has moved Orissa High Court challenging the state government’s minimum dispatch rule, as per MDPA. The matter is sub judice at present.

Another leading merchant iron ore producer, Rungta Mines, is projected to churn out 10.7 mn t in FY’22 compared to a little under 10 mn t in 2020-2021 due to an increase in the EC limit of the Sanindpur mine, which also takes into consideration the production of 1.5 mn t of dump fines.

Other states to boost production

India’s other iron ore-rich states are anticipated to enhance production in FY’22, with production from Chhattisgarh expected to reach 42 mn t from 37.21 mn t in FY’21. The expected increase will be due to a) the rise in capacity of Jayaswal Neco’s Chhotedongar iron ore mine by 2.5 mn t; and b) the addition of another 2.5 mn t from India’s leading miner, NMDC’s 7 mn t/year Deposit 11B in the Bailadila hill ranges of the state.

Likewise, Karnataka’s iron ore output is projected to grow to 40 mn t from around 34 mn t in FY’21. This is due to resumption in operations at NMDC’s 7 mn t Donimalai mine. The rest could come from a surge in production by JSW Steel’s category ‘C’ captive mines in the state.

Mineral-rich Jharkhand is estimated to produce 25 mn t as against 20.88 mn t in FY’21. While the integrated steel producers such as Tata Steel and SAIL have a major share in Jharkhand’s output, the average iron ore production from the eastern state is usually in the range of 25-27 mn t. Like Odisha, the Jharkhand government is also conducting iron ore auctions in the state, which holds up the possibility of increased supplies in the coming days.

India’s iron ore production had fallen by more than 15% in FY’21 compared with 245 mn t in FY’20 due to the adverse impact of the pandemic and delayed resumption of production at the auctioned leases after the Odisha auctions last year.


Prices as on 8:45 IST, 26 Jul. d-o-d changes indicated against closing price of 23 July

 
Odisha iron ore fines

SteelMint: Odisha iron ore fines index down after soft response at OMC re-auction

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index decreased by INR 200/t to INR 9,200/t (ex-mines, including royalty, DMF and NMET). The index slipped around INR 200/t as against the assessment conducted last week.

State-run Odisha Mining Corporation (OMC) held an auction for 689,000 t of iron ore fines this week, having had reduced the total material on offer from 1.06 mn t with an increased base price of INR 2,550/t compared with the last e-auction on 8 Jul’21.

The auction received weak response, with only 117,000 t getting booked at the base price. The auction for 1.06 mn t on 8 Jul was annulled on account of unexpected softening of bids.

Recent trade and rationale:

  • One deal for 18,000 t of OMC’s Daitari lot was considered out of three deals for this week’s index and adjusted after grade difference and considered under T1 trade, being accorded 50% weightage in the index calculation for Fe 62% fines.
  • SteelMint received ten (10) offers, indicative prices under T2 trade in this publishing window of which eight (09) were taken into consideration and given 50% weightage. To check out SteelMint’s iron ore assessments, pricing methodology and specification documents Click here

SteelMint’s iron ore lump (5-18mm, Fe 63%) index stands stable at INR 14,250/t (ex-mines, inclusive of royalty, DMF and NMET). However, no deal was heard this week.

Bids for iron ore lumps rise sharply at NMDC’s Chhattisgarh auction – India’s leading iron ore miner, NMDC, conducted an auction on 20 Jul’21. In the lots auctioned from Bacheli, the auction received active participation with the entire quantity getting booked, except the ROM lot of 16,800 t. Bids for DR-CLO moved up by around INR 1,560/t over the set base price. The entire quantity of 126,000 t of iron ore fines was booked.

Also, the 50,400 t of iron ore auction from the company’s Kirandul mines in Chhattisgarh received active participation with the entire quantity getting booked. Bids for Baila iron ore lump moved up by INR 2,060/t over the set base price. Bids for fines moved up by INR 620/t over the base price.

Jharkhand iron ore auction postponed with JSMDC’s sky-high bid: Jharkhand State Mineral Development Corporation (JSMDC) seems to be hell-bent on playing the lead role in the keenly-watched auction of the precious Ajitaburi iron ore deposit in the state.

Eight out of 24 companies qualified as technical bidders. State-owned JSMDC, however, left everyone behind with an astounding initial price offer of 122% leaving one of the country’s biggest private miners, Rungta Mines, trailing far behind at 92% and DD Steel and Power at 92.4%.

Bids inch down at Karnataka e-auction by private miners on 16 Jul:

  • The auction fetched bids for 157,000 t of iron ore (92,000 fines and 65,000 t lumps) out of the total quantity of 165,000 t put under the hammer.
  • JSW Steel Ltd was the largest buyer at 55,000 t.
  • Iron ore lumps (Fe 58.75%) sold by Vedanta received bids at INR 5,989/t as against INR 6,144/t at the previous auction on 6 Jul.

SC strikes down Goa and Vedanta’s petition to save renewals of 88 iron ore mines: The Supreme Court has dismissed petitions filed by Vedanta and the Goa government to review the order that cancelled the renewal of 88 iron ore leases in Goa in 2018.

The order, authored by the Chief Justice DY Chandrachud, pointed out that “in accordance with Rule 2 of Order XLVII of the Supreme Court Rules, 2013, an application for review of a judgement has to be filed within 30 days of the date of the judgement or order that is sought to be reviewed.”

 

China: Iron ore spot prices rangebound

The spot price of iron ore Fe 62% fines remained largely stable at $201.90/t CFR China, up slightly by $0.40/t d-o-d on 23 Jul’21, as Chinese steelmakers were seen buying discounted fines (for blending) instead of premium ore despite improving steel margins. The iron ore futures market yesterday turned bearish on China’s steel production cuts. The most-traded Sept contract fell by RMB 14/t, as assessed by SteelMint.

 

China: Iron ore futures extend losses on steel output controls

Benchmark iron ore futures on the Dalian Commodity Exchange fell 1.2% on 23 Jul’21, as the Chinese steel market turned bearish and iron ore demand softened on steel production curbs. However, steel futures contracts on the Shanghai Futures Exchange edged up by 0.4%, as per SteelMint assessment. Closing prices of the most-traded iron ore and steel futures contracts:

  • DCE iron ore futures Sept contract closed at RMB 1,124/t ($174) (-RMB 14)
  • SGX iron ore futures Aug contract closed at RMB 192.70/t (-0.35)
  • SHFE rebar futures Oct contract closed at RMB 5,671/t ($876) (+RMB 23)
  • SHFE HRC futures Oct contract closed at RMB 5,968/t ($922) (+RMB 21)