Bhubaneswar: Plagued by several complications, the possibility of opening up of Tata’s Sukinda Chromite mine in near future has become dim. Prolonged closure of the mine would compel the buyers, which were usually dependent on Tata, to move towards OMC, which would intensify the competition in the e-auction and push prices upwards. Some experts anticipate that prices will touch INR 20,000/MT in the next few months.
The trend has already started from the last e-auction of OMC held on 18 Jun, 2014 as buyers like Navbharat & Arti Steel also participated in the auction and have bought 7,100 MT & 5,000 MT respectively. These buyers usually have been dependent on Tata for the last several years and even Navbharat has a conversion agreement with Tata.
Some industry insiders have said that even if Tata gets its lease renewed, there is a high probability that the government may not permit it to do conversion with other companies, likewise what has happened in Tata’s Manganese ore mines case. This would leave companies like Navbharat & Arti with no other option but to either participate in the OMC e-auction or close down plant.
An official in the OMC has said that Navbharat & Arti Steel have indicated that they will participate in the upcoming e-auctions also. So, the rising number of non-integrated participants will definitely increase the demand, but the million dollar question is ‘will OMC be able to meet the rising demand?’ The answer to that is there is very little possibility that OMC would meet the rising demand. Also, commencement of the rainy season will limit Chrome production in the mines further.
Overall the situation is like this – The demand scenario is going to increase in the coming months but at the same time there is little or no possibility that OMC would meet the rising demand of the non-integrated producers, hence pushing prices up.
Friable Chrome ore prices of OMC has crossed INR 15,000/MT in the last e-auction for +54, 52-54 and 48-50 grades owing to aggressive participation of buyers. Even the price for 48-50 grades has increased by 35% to INR 15,323/MT.
Leave a Reply