State owned miner – OMC (Odisha Mining Corporation) conducted an e-auction yesterday (i.e 5 Jul’17) for 249,000 MT iron ore fines. As per report of market participants the e-auction fetched poor response with almost entire quantity remaining unsold.
The material put under hammer is from Gandhamardan, Daitari and Koira mines. The miner had cut iron ore fines base prices up to INR 200/MT for the material offered from Gandhamardan and Koira mines. However base prices for material offered from Daitari mines has remained unchanged.
Market sources highlighted that lower realizations in exports resulted in limited participation from exporters in e-auction.
Yesterday Fe 62% fines index is assessed at USD 63/MT, CFR China which was seen at USD 79/MT, CFR China three months back (i.e. on 05 Apr’17).
On the other hand major Odisha based merchant miners had reduced iron ore prices in Jun’17. Lump prices fell by INR 400-500/MT M-o-M and fines by INR 150-175/MT M-o-M in Jun’17.
Base price comparison of OMC iron ore e-auctions
|
Mines |
Size | Fe (%) | Base Price | Base Price | Base Price as on 05 Jul’17 |
Change | Change | Quantity |
| (mm) | as on 6 Apr’17 | as on 05 Jun’17 | (in INR/MT) | (in %) |
(MT) |
|||
| Gandhamardan | -10 | 64-62 | – | 1,300 | 1,100 | -200 | -15% | 14,000 |
| -10 | 60-62 | 900 | 900 | 800 | -100 | -11% | 50,000 | |
| -10 | 54-58 | – | 500 | 500 | 0 | 0 | 17,000 | |
| -10 | Minus 60 (subgrade) |
– | 600 | 550 | -50 | -8% | 18,000 | |
| Kurmitar (Koira) | -10 | 62-60 | 900 | 1,000 | 800 | -200 | -20% | 50,000 |
| Daitari | -10 | 64-62 | 1,650 | 1,600 | 1,600 | 0 | 0% | 100,000 |
Base prices in INR/MT on ex-mines basis; including royalty
Source: SteelMint Research
As per company reports, OMC produced 6.37 MnT iron ore in FY17, up 6% Y-o-Y.
OMC sells iron ore through long term linkage with end user PSU’s and small sized state based units apart from the material sold through e-auction route. The miner is also allowed to export unsold iron ore after meeting requirement of long term linkage and annual supply agreement buyers and successful e-auction.
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