India: OMC iron ore lumps auction sold out, fines get weak response

State-owned miner Odisha Mining Corporation (OMC) had scheduled iron ore lumps and fines e-auction on 1 Oct’21. About 781,000 tonnes (t) of iron ore lumps and 942,000 t fines were put up for auction.

In the lumps e-auction, the entire quantity received bids. Bids in the auction increased by up to INR 3,700/t as against the base price, according to sources. However, confirmation from the company officials could not be received till the time of publishing this report.

Factors behind improved participation in OMC iron ore lump e-auction –

• Hike in domestic pellet offers: Domestic pellet offers in central and eastern India have witnessed an uptick following improvement in sponge offers. SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 1,400/t to INR 12,300/t DAP Raipur on 1 Oct’21. Buoyant sentiments in the sponge iron and semi-finished steel market have enabled producers to raise offers, SteelMint notes. SteelMint’s India pellet export index (Fe 64%, 3% Al, FOB east coast) increased by $22/t, w-o-w, to $122/t. Pellet exports prices have increased for the week amid rising spot iron ore prices.
• Sponge iron prices up on coal price rally: SteelMint’s assessment for Raipur sponge P-DRI (FeM 80%) rose by INR 1,800/t  d-o-d to INR 34,000/t exw. Amidst higher coal prices, suppliers raised offers significantly.
• Imported iron ore lumps offers rise on global cues: South African iron ore lump import offers into India increased trailing of global iron ore prices. The current assessment for imported lumps (Fe 65%) stands at $125/t CNF Kandla. Global iron ore fines (Fe 62%) prices increased by $7/t, w-o-w, to $115/t CNF China on 30 Sept’21. The spot iron ore lump premium has increased to $0.1280/dmtu this week.

OMC’s iron ore fines auction receives subdued response

The iron ore fines auction received subdued response. The auction fetched bids for 232,000 t of fines at the base price.

Price includes royalty, DMF & NMEFT and additional amount @ 150% of royalty payable. (as per the Gazatte notification dt. 28.03.2021)