India: Iron ore prices in Odisha rise, OMC and Essel hike offers

Iron ore prices in Odisha have continued to increase due to tight availability in merchant market. Odisha’s leading miner – Odisha Mining Corp (OMC) has scheduled its next iron ore e-auction on 3rd Nov’20. The auction is being conducted for 545,000 t iron ore fines. The miner has increased the base price by INR 200/t against last auction’s base price held in Sep’20.

OMC iron ore e-auction details

Base prices in INR/t on ex-mines basis; including royalty
Source: SteelMint Research

Odisha based private miners raised iron ore fines price
Aditya Birla Group-owned – Essel Mining has increased iron ore fines price by INR 300/t, trade sources have reported SteelMint. Amid tight material availability in Odisha’s merchant market, iron ore & pellet offers have continued to increase. Revised offers for Fe 62% fines from Koira stands at INR 3,775/t ex-mines, including Royalty, DMF & NMET.

Another major miner – Rungta mines has raised iron ore fines price by INR 250/t, as per sources. Current offer for Fe 62% fines stands at INR 4,250/t ex-mines, including Royalty, DMF & NMET.

Recent market updates –

• A meeting was held between the Principal Secretary, Department of Steel & Mines, Government of Odisha, Director of Mines and Special Secretary in the Department of Steel & Mines, government of Odisha and the Managing Director of OMC, on October 20, 2020 to discuss the modalities for disposal of the minerals and other infrastructure at the auctioned mines. OMC will dispose of the mineral stock.
• Jindal Steel and Power Ltd (JSPL) may have to share the costs of discrepancies found at its long-term iron ore supplier, Sarda Mines Private Ltd (SMPL).Four-day long raids from 6-9 October resulted last Thursday in a suspension order on all despatches from SMPL’s Thakurani B mine.
• OMC had scheduled its last iron ore lump e-auction on 1st Oct’20. The entire quantity of 668,000 t was booked with bids received above upto INR 1,850/t over the set base price.
• OMC has recorded steady growth in iron ore production over the past years from 6 mn t in FY’16 to 12.4 mn t in FY’20. OMC output was recorded at 0.62 mn t, a significant rise as compared to 0.09 mn t in Aug’20. This is due to resumption in production from its Gandhamardhan B block and commencement of operations at Tiring Pahar.
• Odisha govt may put 14 mineral blocks for auction soon, as per sources