- OMC offered 1.83 mnt iron ore in August auction
- Avg. bids for fines remain stable m-o-m
Odisha Mining Corporation (OMC) auctioned 1.83 million tonnes (mnt) of iron ore on 19 August, comprising 1.21 mnt of fines and 0.62 mnt of lumps. Around 96% of material offered i.e. 1.159 mnt fines got booked out of 1.121 mnt at stable average bids m-o-m. The miner significantly reduced its auction volume this month as heavy monsoon conditions disrupted mining operations, tightening availability and supporting lump ore prices.
OMC had already raised base prices for mid- and low-grade material with Fe content below 62% by INR 100/t, while prices for high-grade fines were kept unchanged.
Market scenario
Production and supply dynamics: Odisha iron ore dispatches fell to a four-month low of 13.3 mnt in June. Offers for lower-grade ore (Fe 57% and below) remained limited in the merchant market over the past month amid intensified checks. Dispatches from key miners, including GVPR, SN Mohanty and OMC, declined m-o-m. OMC’s iron ore dispatches fell from 3.49 mnt in May to 3.36 mnt in June.
Odisha iron ore prices rise by INR 150/t m-o-m: BigMint’s Odisha iron ore fines index (Fe 62%) increased by INR 150/t m-o-m in Aug (till 14 Aug) against July, supported by hampered production at key mines and lower dispatches. However, buyers remained cautious amid subdued finished steel demand and adequate inventories at plants.
Pellet prices rise m-o-m: BigMint’s pellet assessment (6-20 mm, Fe 62.5%) FOR Barbil increased by INR 400/t to INR 8,400/t in August from INR 8,000/t in July. Demand remains healthy, with sellers actively looking to procure pellets amid moisture-related issues in lumps and support from modestly improved semi-finished steel prices.
Sponge iron prices gain INR 1,400/t m-o-m: Domestic sponge iron (CDRI) prices in Rourkela increased by around INR 1,400/t m-o-m in August, supported by improved buying activity and healthy buyer participation. Limited availability of key inputs, along with higher pellet and coal prices, has raised production costs for sponge iron manufacturers. At the same time, improved buying activity in the finished steel segment is supporting overall market sentiment and strengthening demand for sponge iron.
Outlook
Iron ore prices in Odisha are expected to rise marginally, with private miners likely to raise offers slightly in the second half of August. However, trading activity may remain active amid continued uncertainty over input availability.
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