State PSU miner Odisha Mining Corporation (OMC) has decided to re-conduct the 1.06 mn t of iron ore fines e-auction held on 8 Jul’21, as per latest reports available with SteelMint. The leading merchant iron ore miner has annulled the e-auction on account of unexpected softening of bids, which recorded a marginal rise of up to INR 250/t against the set base price. The rescheduled auction could be held on 16 Jul or sometime towards the end of the week, as per information shared by sources.
Strikingly, bids dropped by INR 1,100-1,950/t compared with OMC’s previous auction on 10 May, which was surprising given the prevailing stiff market prices of iron ore offered by the private merchant miners in Odisha. SteelMint’s weekly iron ore fines Fe 63% index was assessed at around INR 10,200/t on 3 Jul, up INR 800/t m-o-m.
As SteelMint reported earlier today, sources had informed that OMC was likely to cancel the 8 Jul auction due to the fact that bids had declined beyond expectations, given the strong market prices of iron ore. The material offered at the auction was from OMC’s Gandhamardan, Daitari, Koira, Jilling, Tiring Pahar and Guali mines.
Change in auction schedule
It has also been learnt that OMC will henceforth conduct iron ore fines auctions at an interval of 30-40 days instead of the usual two-month gap between auctions that had been the norm till now. This move could be directed at keeping tabs on fluctuating ore prices and pre-empt the drastic fall in prices between auctions, or to divert the possibility of any unnatural fall in prices, SteelMint notes.
With 13.30 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 after months of non-production following the Odisha auctions in 2020.
OMC reserves about 30% of its annual production for auctions, with the rest earmarked for long-term linkage customers.
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