India: Price bids fall by INR 2,200/t as OMC iron ore e-auction receives lukewarm response

• Bids fall sharply against last auction despite entire quantity getting booked
• Odisha’s iron ore production increased by 10% m-o-m in Dec’20
• Sponge iron (C-DRI) prices have come down by INR 4,000/t m-o-m

Odisha’s state-owned miner- Odisha Mining Corporation (OMC) had scheduled iron ore e-auction yesterday (01st Feb’21) for 933,000 t iron ore lumps. Entire quantity put to auction was booked however, bids fell by up to INR 2,200/t against the last e-auction conducted on 2nd Dec’20. Odisha iron ore prices have come under pressure on improved supplies and decline in sponge prices.

The miner had increased the base price by up to INR 1,500/t against last auction’s base price held on 2nd Dec’20. The bids were higher by up to INR 700/t against the set base price.

The material put under the hammer was from Gandhamardan, Daitari, Koira mines and Tiring Pahar mines.

OMC iron ore lumps e-auction summary

Key highlights-

• Odisha’s iron ore production increased by 10% m-o-m to 11.4 mn t in Dec’20
• Sponge iron C-DRI prices in Durgapur have come down by around INR 4,000/t m-o-m and stands at INR 23,650/t DAP. Prices have come down on decline in billet and rebar prices in the secondary market
• SteelMint’s index for Odisha iron ore lump (5-18mm, Fe 63%) index stood at INR 8,200/t (ex-mines, including Royalty, DMF & NMET), lower by INR 600/t m-o-m
• Odisha Govt. allocates Guali and Jilling iron ore mines to OMC with an objective to increase iron ore production. These mines have a combined production limit of 12 mn t per annum.