Major merchant iron ore miners in Odisha are maintaining the same offers as of now after they had raised prices since Dec’17 expecting supply disruption in near future. Miners had raised iron ore prices upto INR 800/MT in Dec’17 and further by INR 500/MT in Jan’18.
In the month of Dec’17 when SC instructed for recovery of 100% compensation in lieu of the excess ore lifted. In Jan two major miners Serajuddin and Essel mining went out of operations owing to inability to submit the penalty amount by the deadline of 31st Dec’17.
However, throughout Feb’18, miners kept prices unchanged. But with few major miners resuming sales, in the second half of Feb’18 market participants are eyeing for fall in Odisha iron ore prices in near term. If trade sources are to be believed, Odisha merchant miners are offering discounts of INR 200-300/MT. But miners are likely to announce fresh offers next month. However, market sources are eyeing for a considerable reduction in offers in coming weeks.
Factors that have put Odisha iron ore prices under pressure-:
1. Domestic pellet offers moved down sharply-: Pellet trades have weakened and prices in INR 900-1,100/MT in Eastern and Central India since beginning of Jan’18. Buying interest has narrowed down and limited trade activities for very small quantities put pellet prices under pressure.
2. OMC iron ore auction receives lower bids than the previous e-auction-: OMC auction held on 7th Mar’18 received a good response with entire quantity receiving bids, but the bids were received at prices lower than bids received in the previous auction (6th Jan).
The bids received for auction held on 6th Jan’18 was up INR 600/MT against base price for Gandhamardan and Koira mines each. For Daitari mines, it stood up by INR 800/MT, While for auction held recently on 7th Mar ’18 the Daitari mines received bids at a set base price of INR 1900/MT. Bids stood up by INR 350-450/MT over the set base price of INR 1,000/MT for Gandhamardan and Koira mines each.
3. NMDC decreased iron ore prices for March- National Mineral Development Corporation (NMDC), state-owned entities has slashed its prices by INR 90 to INR 120/MT for March deliveries. It has cut prices of Baila lump and fines by INR 100/MT M-o-M.
4. Improved Iron ore Supply in Odisha post resumption at few mines-: The Supreme Court allowed few major merchant miners like Serajuddin and Essel mining in Odisha to resume its operations after submission of penalty amounts on illegal mining case. Following which miners resumed sales. This has resulted in improved iron ore supply in the state.
Amid these reasons, market participants are anticipating that Odisha merchant miners may reduce offers in coming weeks.
JSPL reduces iron ore offers from Tensa Mines – JSPL has recently reduced iron ore offers by INR 650/MT from its Tensa mines. Its current offers for 5-20mm (Fe 59/60%) grade stands at INR 3,000/MT, ex-mines including Royalty, DMF & NMET. The company has kept 100,000 MT per month for sale in the market.
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