Almost the entire auctioned quantity of 32,500 MT of Friable Ore and Chrome Concentrate was bid for, but for an unusually low price despite Ferro Chrome prices having soared and international chrome ore prices too.
State-owned, Odisha Mining Corporation (OMC) recently conducted an e-auction for sale of 29,900 MT Friable Chrome Ore and 2,600 MT Chrome Conc. on 5th Sep’17. The commodity put under the hammer was from South Kalaipani mines, Sukrangi mines, and COBP Kaliapani.
In this round of auction, the weighted average H1 price of the previous auction was set as floor price.
The bids received were slightly above the floor price, on an average of 8.11% for friable ore and 12.69% for chrome concentrate. The reason for the same could be the introduction of a new clause by OMC, as revealed by a market source. As per this clause, the National E-auction buyer will have to lift more than 70% of the bid quantity or they might get barred from participating in next round of auction. The rules of the bidding as per the new clause are as follows:
- Participants lifting 70% or less of bid quantity will be barred from participating in next e-auction
- Participants lifting 50% or less of bid quantity will be barred for next 3 e-auction
- Participants lifting 30% or less of bid quantity will be barred for next 12 e-auction
“The National e-auction buyers generally bid for small quantities and push the bid prices up, while, a few of them also default and do not lift the bid quantity. This has been an odd practice which troubles both OMC as well as the Long-term Linkage buyers. Hence, the implementation of the new clause became necessary as the small quantity buyers will have to be determined by bidding,” said a source, while discussing the introduction of the new clause.
The bid received were above the base price for friable ore at INR 10,623/MT for +54% grade, INR 9,836/MT for 52-54% grade, INR 8,295/MT for 48-50% grade, INR 7,525/MT for 46-48% grade, 6,188/MT for 44-46% grade and INR 5,875/MT for 42-44% grade.
The same for Chrome Concentrate was at INR 11,036/MT for 50-52% grade, INR 8,596/MT for 48-50% grade, INR 8,595/MT for 46-48% grade, while 52-54% grade ores were bid at its floor price at INR 9123/MT. As per market sources, almost all the quantity offered were bid for except 38-40% grade Chrome Concentrate from COPB Kalianpani.
Previous OMC Chrome Ore Auction on 3rd Aug’17
OMC Chrome Ore Auction, which was held in August, had also received a good response as more than 90% of the auctioned commodity was bid for.
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