State-controlled miner OMC, has recently conducted an e-auction for 245,000 MT iron ore (110,000 MT CLO & 135,000 MT fines) on 21 June’16. The company received an extremely poor response. Only 10,000 MT was sold out of the total offered quantity.
The miner put 245,000 MT iron ore under e-auction from Gandhamardan mines. Since from last few auctions the company was unable to receive the response for the material offered from Gandhamardan mines. Also, the company had not corrected base prices for the last e-auction.
In talk with few market participants, they still blame higher base prices, the major reason behind receiving a poor response in their e-auctions. Also, few participants like Rashmi Metaliks, Bhushan Steel, and Bhushan Power, who frequently procured material from OMC e-auctions have shifted their interest towards material offered by private miners because of some logistic advantages.
OMC plans to conduct e-auction in every alternative month
The company is now planning to focus more on the long-term contracts with Odisha-based steel makers rather than e-auctions.
Few market participants also shared that “OMC will now conduct e-auctions on 28th of every alternative month. In addition, the company has also planned to follow the suit for Chrome ore e-auctions. The next e-auction will most probably to be conducted on 26 Aug’16 for Chrome ore and on 28th Aug’16 for iron ore”.
Result of OMC iron ore e-auction held on 21 June’16
| Mines | Size (mm) | Fe (%) | Base Price | Offered Quantity (MT) | Quantity Sold (MT) |
| Gandhamardhan | 10-40 | 62 | 1750 | 65,000 | 10,000 |
| 5-18 | 65 | 2200 | 10,000 | – | |
| 10-180 | 65 | 1500 | 35,000 | – | |
| -10 | 62-60 | 800 | 135,000 | – | |
| Total | 245,000 | 10,000 | |||
Base prices in INR/MT on ex-mines basis; including of royalty
Source: SteelMint Research
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