India: OMC’s iron ore fines e-auction receives decent response

• Nearly 86% of the offered quantity got booked
• Bids remained close to set base price, however have fallen sharply against Jan’21 auction
• Odisha’s iron ore production up marginally in Jan’21

Odisha’s state-owned miner- Odisha Mining Corporation (OMC) had scheduled an iron ore e-auction today (10th Mar’21) for 882,000 t iron ore fines. 86% of material (i.e about 767,000 t) put to auction was booked. The bids have fallen sharply up to INR 1,200/t against the last e-auction conducted on 7th Jan’21 in line with price drop seen in merchant market on improving supplies.

OMC had kept the base price-stable against the last e-auction conducted on 7th Jan’21. The material put under the hammer was from Gandhamardan, Daitari, Tiring Pahar, Guali, and Jilling mines.

OMC iron ore fines e-auction summary

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

Key highlights-

• Guali and Jilling-Langalota were given over to OMC by the government after the respective bidders JSPL and Shyam Ores, Jharkhand, failed to commence operations due to disputes and other constraints. This was in the backdrop of iron ore supply shortage in the country due to the non-operationalization of auctioned mines in Odisha. The mines have a combined EC limit of 12 mn t/year.
• It is believed that OMC will reserve around 70% of the minerals extracted for fulfilling long-term contracts and could put the rest for sale at auctions.
• Odisha – India’s largest iron ore producing state produced 12.05 mn t in Jan’21, up marginally as against 11.86 mn t in Dec’20, according to the provisional data of the Odisha Govt.
• SteelMint’s index for Odisha iron ore fines (Fe 62%)towards end of last week stands at INR 5,150/t (ex-mines, including Royalty, DMF & NMET), down by INR 350/t m-o-m.