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Indian Steel Mills Step Up Iron Ore Buying-2020 China(Guangzhou)Int’l Metal & Metallurgy Exhibition-metal exhibitio
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1/3/2020 金属展-冶金展-钢铁展-steel expo-metal &metallurgy expo |
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Business Standard reported that Indian steel manufacturers have accelerated iron ore buying as they dread marked disruption in supplies after the end of lease tenure of merchant mines by March 31, 2020. BS reported “Almost all leading integrated steel makers and secondary producers have intensified iron ore sourcing to avert raw material crunch and ensure uninterrupted plant operations. They are looking to build up stocks for three to six months. Steel companies are weighing options to stash the ore in stockyards by availing land on lease. The Odisha government has previously allowed storage permits for both end user industries and merchant ore producers whose validity runs till March 2022. The grant of storage licenses for the merchant miners was warranted by the huge inventory of minerals within lease area. The disposal and sale of this stockpile was needed to facilitate smooth transition of ownership of mines and also to avert any obstruction in their production after take over by the new bidders following auctions.
Aa leading merchant miner said “We are now witnessing brisk buying from steel players and secondary steel producers. Merchant miners have not gone for any significant hike in prices of lumpy ore or fines of late as we need to liquidate the piled up ore. An uptick in domestic steel demand and the impending expiry of lease tenure has spurred intense buying of iron ore.”
Industry sources have estimated the accumulated ore at mine lease heads of merchant mines in Odisha at around 70 million tonnes. However, a bulk of the inventory is made up by baser grade fines which hardly have any uptake in the domestic market. S
teel manufacturers opt for lifting higher grade ore as inferior material escalates their costs of operations. Export markets too have been unkind to Odisha’s inferior iron ore as China’s steel mills driven by environment concerns have preferred to source superior ore or iron ore pellets.
Supply disruptions of iron ore seem ineluctable as the Union government is yet to take a firm call on extending environment and forestry clearances. Even if the two key milestones are negotiated, the new leaseholders still have a bumpy ride to cover before they could lay hands on the mines. A host of approvals like Mining Plan endorsed by Indian Bureau of Mines and Consent to Establish & Consent to Operate granted by the State Pollution Control Board need to be obtained. The state steel & mines department has set January 3 as deadline for submitting technical and financial bids in respect of these 20 blocks. Letters of Intent are scheduled to be awarded in the first week of February 2020.
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