Steel 360 analysis of Indian iron ore industry

Steel 360 has analysed the Indian Iron ore industry and compared the Iron ore production & export of FY14 & FY15. Let’s know the scenario.

 

Financial Year 2014

Financial Year 2015

 

 

 

 

 

 production

 

Iron ore production raised nearly 6% Y-o-Y to 144 MnT on resumption of mining activities in Karnataka.

 

Ø Odisha remained steady at 62-63 MnT production, may witness rise in FY15

Ø NMDC production touched 30.2 MnT

Ø Karnataka’s fresh production touched roughly 16 MnT

Ø Serajuddin Mines obtained EC limit of 15 MnT; production stood at about 7 MnT

Ø Production from Essel (Jhilling), R P Sao, KJS (Thakurani) slumped remarkably

 

 

Iron ore production can ascend to nearly 150 MnT with an expected resumption of few A & B class mines in Karnataka & restarting of mining operations in Goa.

 

Ø Production should improve in Karnataka; 19 MnT of fresh production is projected

Ø Supreme Court lifts mining ban in Goa. One can assume fresh production of roughly 9-10 MnT

Ø Production may well escalate in Odisha by 4-5 MnT if no caps are set by the Supreme Court on  Shah Commission’s counsel

Ø Production numbers could step up from Serajuddin, Essel & Rungta Mines

 

 

 

 

 

 

 export

 

 

 

Export fell by 20% Y-o-Y to 14.4 MnT, for the reason that Iron ore mining and export ban were sustained in Goa.

 

Ø Export from Paradip stood at around 5.6 MnT, followed by Vizag Port at 4.8 MnT and balance from Haldia, Dhamra,Gangavaram, Kakinada & Redi Port

Ø Rungta Mines were status quo as largest exporter with 2.6 MnT of export in Jul’13-Mar’14, ahead of MMTC (on behalf of NMDC),which was at 1.8 MnT

Ø Respite for Indian Iron ore exporters as the apex court permitted sale of 15 MnT stockpile in Goa through e-auction; 1st shipment went on 2 Apr, 2014

 

 

Perhaps, Export may restore at 18-19 MnT, as export from Goa picks up. Conversely, China spot Iron ore prices and INR can be challenged.

 

Ø Paradip port will possibly hold on to export at same level. As Indian exporters are paying high plot rent at Paradip, they would be looking forward to exploit extensively

Ø Goa should give close to 5 MnT on the back of existing movement in export

Ø Odisha government curbs export of Iron ore Fines generated through production of Sponge iron; might not blow exports to a major quantity