State-run Odisha Mining Corporation (OMC) has rescheduled its iron ore fines auction, initially held on 8 Jul’21, for 22 Jul, as per latest SteelMint reports. However, the quantity to be put under the hammer has been reduced to 689,000 t compared with 1.06 mn t earlier. The auction was cancelled by OMC due to unexpected fall in bids.
Steep rise in base price
Interestingly, OMC has increased the base price for the auction by up to INR 2,550/t as against the last e-auction on 8 Jul. For the record, the last auction saw a marginal rise of up to INR 250/t against the set base price.
However, bids dropped by INR 1,100-1,950/t compared with the PSU miner’s previous auction on 10 May, which was surprising, not least because iron ore prices are going pretty strong on a) supply concerns in domestic market; b) high steel prices; and c) record-high global prices.
Even private merchant miners in Odisha are yet to reduce offers. In fact, a few days before the OMC auction was held, SteelMint had assessed weekly iron ore fines Fe 63% prices in Odisha at around INR 10,200/t on 3 Jul, up INR 800/t m-o-m.
OMC sources had previously informed SteelMint that decline in bids at the auction was beyond expectations, given strong market prices of iron ore. The material offered was from OMC’s Gandhamardan, Daitari, Koira, Jilling, Tiring Pahar and Guali mines.
All eyes on auction outcome
Now that OMC has raised the base price for the upcoming auction vis-à-vis the bids received at the 8 Jul auction, the market will be keenly awaiting the outcome of the auction.
Moreover, OMC will henceforth conduct iron ore fines auctions at an interval of 30-40 days instead of the usual two-month gap between auctions that had been the norm. This move could be directed at keeping tabs on fluctuating ore prices and pre-empt the drastic fall in prices between auctions, or to divert the possibility of any unnatural fall in prices, SteelMint notes.
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