- OMC reduces lump auction volumes amid monsoon disruptions
- Higher DRI prices support lump ore, pellet demand
Lloyds Metals and Energy has raised its iron ore lump and pellet offers by INR 250/t in Chandrapur, Maharashtra, effective 20 August, as monsoon-related supply disruptions tighten availability of lump ore and stronger sponge iron realisations support procurement. Lump offers increased to INR 10,000/t, while pellet offers rose to INR 10,750/t ex-works while fines (Fe 63%) offer remained unchanged.
The price increase coincides with tighter availability in the domestic lump ore market. Odisha Mining Corporation offered around 0.62 mnt of lumps in its 19 August auction, down from 0.88 mnt in July and 1.14 mnt in June, as monsoon conditions delayed mining and dispatches.
The auction received bids for 0.618 mnt, or nearly 99% of the offered quantity. Winning bids ranged from INR 4,400-7,700/t, with weighted average premiums around INR 170/t over notified base prices. Although the average premium increased only INR 170/t m-o-m, OMC had already raised lump ore base prices by INR 250/t ahead of the auction.
Weighted average bids for Fe 62%, 5-18 mm lumps increased INR 400/t m-o-m to INR 5,650/t, while bids for Fe 62%, 10-40 mm material increased by INR 200-250/t.
Higher sponge iron realisations are providing additional support to lump ore and pellet demand. Monthly average PDRI prices in Hyderabad increased by INR 1,100/t m-o-m to INR 27,200/t ex-works in August to date.
The stronger DRI realisations are encouraging producers to replenish inventories of lump ore and pellets, improving their ability to absorb higher feedstock costs. This has added demand-side support to a market already facing lower availability due to monsoon disruptions.
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