State-owned miner Odisha Mining Corporation (OMC) has scheduled iron ore lumps and fines e-auction on 1 Oct’21. About 781,000 t of iron ore lumps and 942,000 t fines will be put up for auction.
For lumps, in the upcoming auction, the miner has reduced the base price by upto INR 4,100/t as against the base price seen in the auction held on 31 Aug’21.
However, for fines, the auction base price has been reduced by upto INR 700/t against the bid price seen in the 31 Aug’21 auction.
In the last auction held on 31 Aug’21, the miner fetched bids for only 238,000 t of iron ore lumps out of 765,000 t put up for auction and for 20,000 t of iron ore fines out of 902,000 t offered.
Snapshot of fines e-auction
Base prices in INR/t on ex-mines basis; including royalty
Qty in t
Source: SteelMint Research
Information available with SteelMint reveals that among 19 of OMC’s LTL buyers, as many as 11 have not lifted 50% of their allotted quantities from Jan-Sept’21. Only two have lifted around 90%, and the rest are ranging from 56-74%. OMC’s auctions are a price discovery mechanism even for its LTLs. However, these very auctions are setting a low price range.
With 13.3 mn t of iron ore production in FY’21, OMC had emerged as the leading merchant miner in Odisha.
SteelMint’s weekly Odisha iron ore fines (Fe 62%) index fell sharply by another INR 700/tonne (t) to INR 5,050/t (ex-mine, including royalty, DMF and NMET). The index fell close to one-year low compared to INR 4,800/t since early-Nov’20. Lowering bids, falling pellet prices and expectations of price cut by Odisha based miners have resulted in a drop in the index.
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