Sponge makers in Odisha have asked to OMC for price cut owing to poor responses in few e-auctions.
All Odisha Steel Federation (AOSF) has recently appealed to Odisha Mining Corporation (OMC) to reduce base price of iron ore, which will be offered in the upcoming e-auctions.
Sponge iron prices have drastically declined owing to sluggish demand and weak global sentiments. Prior three months, sponge iron prices in east India were assessed at INR 15,900/MT ex-Rourkela, which have dipped by INR 2,000/MT and currently at INR 13,700-13,800/MT.
Mr. PL Kandoi, President of AOSF stated, “Sponge iron prices since past few months have been fallen drastically, but there is no change in iron ore lump prices offered by OMC. The company offered 10-40 mm Fe 62% grade material at INR 2,600/MT. This would be difficult to produce sponge iron at such levels as there will be loss of around INR 800-900/MT production”.
OMC’s Previous Auctions Scenario
In the recent auction conducted on 09 July’15, the company offered 314,000 MT iron ore from Koira, Daitari and Barbil mines. The company could only be able to sell 10% of the offered material. Larger units haven’t showed buying interest as the base prices were not suitable for them. But, smaller units were forced to purchase the material at such prices as there is no option left.
Auction conducted in the month of June does not gave overwhelming response as most of the material remained unsold.
Although, the company had reduced base prices for some grades by 21% in the auction conducted in May’15, it could have sold almost 80% of iron lump offered in the e-auction.
Base price Comparison of Iron ore E-auctions
| OMC Mines | Size (mm) | Fe% | E-auction on 09 July’15 |
E-auction on 17 Jun’15 |
E-auction on 25 May’15 |
E auction on 12 May’15 |
E-auction on 02 Apr’15 |
| Kurmitar (Koira) | 10-40 | 62 | 2900 | 3200 | – | 3200 | – |
| -10 | 56-52 | – | 900 | 900 | – | – | |
| -10 | 62-60 | – | 1500 | – | 1565 | – | |
| Daitari | 10-40 | 62 | 2600 | – | 2600 | 3000 | 3,000 |
| -10 | 64-62 | 1700 | – | 1700 | 1900 | 2,200 | |
| -10 | 62-60 | – | – | 1500 | 1750 | 2,000 |
Ex-mines prices, including royalty
*FOR prices
E-auction floor prices in INR/MT
Source Steelmint Research
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