SteelMint’s weekly Odisha iron ore fines (Fe 62%) index has moved down by around INR 1,200/t to INR 6,900/t (ex-mines, including royalty, DMF and NMET). Recently, Odisha’s Essel mining has cut offers by around INR 1,600/t for Fe 62% fines. However, Essel’s lease expired on 26 Aug’21. The market expects a correction in offers by other miners as well in the near term.
Buyers are waiting for OMC’s upcoming iron ore auction scheduled on 31 Aug before placing orders. Notably, the miner’s iron ore despatches have fallen to 1.34 mn t in Jul against 2.37 mn t in Jun owing to falling offtake and subdued response in past auctions.
Recent trade and rationale:
- No deals were heard this week for fines and, therefore, not considered under T1 trade, accorded 0% weightage in the index calculation for Fe 62% fines.
- SteelMint received seven (07) offers, indicative prices under T2 trade in this publishing window and five (05) were taken into consideration and given 100% weightage. To check out SteelMint’s iron ore assessments, pricing methodology and specification documents Click here
SteelMint’s iron ore lump (5-18mm, Fe 63%) index also fell sharply to INR 12,300-12,500/t (ex-mines, inclusive of royalty, DMF and NMET), lower by INR 200/t on week.
A trader informed SteelMint that a few deals done previously were not getting dispatched as buyers happen to be cancelling existing orders.
OMC has reduced base price for its upcoming iron ore lump e-auction on 31 Aug’21 by INR 1,000-1,800/t compared to the floor price in the previous auction of 31 Jul’21.
Highlights:
- 38 companies in race for 10 iron ore blocks in Odisha. Odisha’s upcoming mineral auctions of 10 blocks have drawn 123 bids from 38 mining and metal companies.
- OMC iron ore fines auction draws subdued response on falling pellet prices. OMC had scheduled an iron ore fines e-auction on 23 Aug’21. The auction fetched bids for only 24,000 t out of a total of 866,000 t put to auction. Out of the total booked quantity, 19,000 t was booked from the Gandhamardan mines and the remaining from OMC’s Koira mines for sub-grade ore.
NMDC’s Chhattisgarh auction receives dull response: Leading iron ore miner NMDC had conducted an auction on 26 Aug for 147,000 t of iron ore from the company’s Kirandul and Bacheli mines in Chhattisgarh. The auction received dull response with the fines lots remaining unsold and the lump ore fetching bids close to the base price. The decline in iron ore and pellet prices in the domestic market explains the tepid response that the auction elicited, sources highlighted.
Goa defers iron ore e-auction to 31 Aug, lowers quantity on offer: The Directorate of Mines and Geology (DMG) of Goa postponed the iron ore e-auction that was to be held on 27 Aug to 31 Aug. Also, the quantity to be put to auction was revised to 1.574 mn t as against 2.037 mn t announced previously. Most of the quantity to be put under the auction will be of low grade with the highest grade (as per DMG analysis) being Fe 58.01%.
NMDC’s Kumaraswamy iron ore auction receives good response – NMDC conducted an iron ore e-auction from its Kumaraswamy mines on 25 Aug at which the entire volume of 61,000 t of iron ore was booked. JSW Steel Ltd. emerged as the largest buyer at 52,000 t of iron ore fines followed by Minera Steel and Power Private Ltd. at 8,000 t. The iron ore fines (Fe 64.18%) lot was booked at INR 5,323/t and lump ore (Fe 58.67%) was booked at INR 5,003 (basic, taxes extra).
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