SteelMint: Odisha iron ore fines index down INR 200/t post-weak response to OMC auction

SteelMint’s weekly Odisha iron ore fines index (Fe 62%) decreased by around INR 200/t w-o-w to INR 3,400/t ex-mines.

Odisha Mining Corporation’s (OMC’s) iron ore fines auction was held yesterday. Out of 14,31,000 mnt put on offer, only 3,74,000 t (26%) received bids. In another auction of iron ore lumps yesterday, around 57% (542,000) out of a total quantity 955,000 t received bids. Lower capacity utilisation at pellet plants and bid-offer disparities resulted in lesser participation.

Recent deals:

OMC’s Jilling, Khandbandh and Unchabali deal of around 220,000 t of iron ore fines, concluded at INR 3,300- 3,450/t ex-mines, was taken into consideration for Fe62% fines index calculation this week. However, other mine deals were not taken into consideration.

Rationale:

• T1- Three deals were considered for high grade ore (Fe 62%) index calculation. Therefore, 50% weightage was given to it this week.
• T2- SteelMint received six (06) offers and indicative prices under T2 trade deals in this publishing window out of which five (05) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here.

Highlights from other states:

• NMDC’s auction from Karnataka receives active response: National Mineral Development Corporation (NMDC) scheduled an auction on 16 August for sale of 376,000 t of iron ore from its Kumaraswamy mines, Karnataka. According to market sources, the entire quantity of 188,000 t each of fines (Fe56.43-63.77%) and lumps (Fe62.05-65.33%) was booked at around INR 1,475-2,185/t and INR 2,450-2,829/t, respectively. Prices are exclusive of royalty, DMF and NMET.
• No offers from Chandrapur-based miner – No fresh offers from Chandrapur’s leading miner were heard this week, as the miner has been completing the deliveries of old dispatches amidst weather constraints.