OMC’s Iron ore e-auction held on 12 May’15 was a setback, fetching extremely cold response.
OMC recently conducted an iron ore e-auction on 12 May’15. A total quantity of 348,000 MT (160,000 MT iron fines & 188,000 MT iron lumps) were put under auction. With most of the lots unsold, the event ended up in disappointment and overall failure. The company may reschedule this auction with further reduction in base prices.
Koira Mines turned out to be the most preferred mines. Aggressive participation for these mines was seen in the auction. “Overbooking of the material has been done as compared to offered quantity with higher base prices for Koira Mines”, a participant remarked.
Material offered from various mines like Gandamardhan, Daitari remained unsold due to higher base prices. Iron lumps offered from Barbil mines received minute response as only 2,000-3,000 MT material could be sold out of total.
OMC had Cut Base Prices for Few Grades
Although, OMC had reduced its base prices in this e-auction for few grades, especially for fines offered from Daitari mines by 12-13%, it failed to get good response from buyers. Participants blame higher base prices (at INR 3,000/MT) as the major drawback behind this failure. They are not ready to buy domestic iron ore at such levels and refrained from participation in the auction.
OMC may Further Reduce Base Prices
Continuous unpleasant response in last few e-auctions may force OMC for further reduction in base prices. The participants in recent auction asked the company officials to reschedule this e-auction with further reduction in base prices.
OMC Iron Ore E-auction Base Prices (Jan’15-May’15)
|
OMC Mines |
Size (mm) | Fe(%) | E-auction held on 12 May’15 |
E-auction held on 02 Apr’15 |
E-auction held on 07 Mar’15 |
E-auction held on 27 Feb’15 |
E-auction held on 25 Feb’15 |
E-auction held on 20 Feb’15 |
E-auction |
| Barpada Kasia (Barbil) | 10-40 | 62 | 3,050 | 3,237 | – | 3,237 | – | 3,237 | 4,379 |
| 10-40 | 64 | – | – | – | – | – | – | ||
| -10 | 62-60 | – | 1,500 | – | 1,500 | – | 2,057 | 2,571 | |
| Gandhamardan | 5-18 | 64 | – | – | – | – | – | – | – |
| 10-180 | 65 | 2,650 | 2,650 | – | – | – | 2,955 | 3,427 | |
| 10-40 | 62 | 3,000 | 3,000 | 3,000 | – | – | 3,318 | 3,903 | |
| -10 | 62-60 | 1,520 | 1,520 | – | 1,520 | – | 2,023 | 2,380 | |
| -10 | 60-54 | 1,333 | 1,333 | – | – | – | 1,333 | 1,333 | |
| Kurmitar (Koira) | 10-40 | 62 | 3,200 | – | – | – | 3,641 | – | – |
| 5-18 | 65 | – | – | – | – | – | – | – | |
| -10 | 62-60 | 1,565 | – | 1,565 | – | 2,104 | – | – | |
| Daitari | 10-40 | 62 | 3,000 | 3,000 | 3,000 | – | – | 3,237 | 3,808 |
| -10 | 64-62 | 1,900 | 2,200 | – | – | – | 2,427 | 2,856 | |
| -10 | 62-60 | 1,750 | 2,000 | – | – | – | 2,261 | 2,666 |
Ex-Mines prices, including Royalty
*FOR Siding prices
E-auction floor prices in INR/MT
Source: SteelMint Research
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