Entire quantity offered managed to receive bids and bids went up by up to INR 1000-1150/MT against base price.
Odisha Mining Corporation (OMC), a state-owned miner conducted e-auction today (i.e. 18 Jan’18) for 480,000 MT iron ore lumps. The material put under hammer was from Gandhamardan, Daitari and Koira mines.
The miner increased the base prices for materials offered from all the three mines. The base price for material offered from Gandhamardan has increased by INR 600/MT, from Kurmitar (Koira) has been increased by INR 550/MT and prices for material from Daitari mines increased by INR 600/MT following price hike by other Odisha merchant miners.
According to market sources report to SteelMint, the e-auction received overwhelming response with entire offered quantity receiving bids. For Gandhamardan and Koira mines, bids received were up INR 800-1150/MT against base price. However for Daitari mines, bids moved up marginally by INR 50/MT.
The reasons for overwhelming response to the auction are
1. Unavailability of prompt cargo: The closure of five working iron ore mines in Odisha has dropped availability of prompt iron ore from the states, which has triggered sharp price hikes by other operating miners.
The operational mines held by Serajuddin & Company, Mesco Steel, state-run Industrial Corporation of Odisha Ltd (Idcol) and others were closed on January 1 this year after they failed to pay out the Supreme Court-mandated compensation. The shutdown of these mines is estimated to eliminate around 15-17 million tonnes of iron ore production per annum.
2. Higher prices by merchant miners: Operating merchant miners have raised their ore prices by Rs 500/t post closure of five mines. Current offers by private miners for calibrated lumps (5-18mm,63%) are assessed at Rs 5,100-5,300/t, screened lumps (10-30mm, 61/62%) are assessed at Rs 4,400-4,600/t and fines (63%) at Rs 2,200- 2,400/t on ex-mines basis, including royalty, DMF and NMET.
Base price comparison of OMC iron ore e-auctions
| Mines | Size | Fe (%) | Base Price | Base Price | Bid Price | Quantity | |
| (mm) | as on 06 Dec ’17 | as on 18th Jan’18 | (MT) | ||||
| Gandhamardan | 10-40 | 62% | 2,000 | 2,600 | 3,400 | 180,000 | |
| Kurmitar (Koira) | 10-40 | 62% | 2,650 | 3,200 | 4,200-4350 | 180,000 | |
| Daitari | 10-40 | 62% | 2,600 | 3,200 | 3,250 | 120,000 | |
Base prices in INR/MT on ex-mines basis; including royalty
Source: SteelMint Research
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