State-run Odisha Mining Corporation (OMC) has scheduled an auction for over 2 million tonnes (mnt) of iron ore fines and lump on 19 August, 2022. Around 1.43 mnt of fines and 0.96 mnt of lumps will be put up for auction from OMC’s mines.
The miner has decreased the base price for fines by up to INR 600/t. For lump, however, base prices have remained unchanged as against the last auction held on 18 July.
Factors behind drop in base price:
- Steel mills lower capacity utilisation: Indian steel manufacturers have undertaken maintenance shutdowns or are running on reduced capacities a couple of months ahead of schedule because of slow overseas and domestic steel demand.
- Curtailment in pellet production on export duty impact – Production of iron ore pellets in India dropped by nearly 20% m-o-m in June to around 5.7 mnt as against 7 mnt in May, as per data maintained with SteelMint. Production fell due to the sudden impact of the export duties imposed on steel and raw materials towards the end of May that affected merchant output. India’s pellets export shipments were recorded at 55,000 t in July, a significant fall of 35% m-o-m as against 84,300 t in June, according to the vessel line-up data maintained with SteelMint.
- Average global iron ore prices fall by around $23/t m-o-m in July: Average Chinese spot iron ore fines (Fe 62%) prices closed at $107/t CNF China in July, lower by $23/t m-o-m. Prices decreased due to a bearish demand outlook. Furthermore, participants in the seaborne iron ore market were uncertain about demand recovery. Combined iron ore inventory at major Chinese ports stood at 138.6 mnt on 11 July, increasing by 2 mnt as against 136.6 mnt a week ago, as per SteelHome data.
OMC produced 27 mnt of iron ore in FY’22. Production increased sharply compared with 13.06 mnt in FY’21.
.jpg)
Leave a Reply