SteelMint’s weekly index for Odisha iron ore fines (Fe 62%) fell by around INR 400/t to INR 8,900/t (ex-mines, including Royalty, DMF & NMET). Miners kept offers unchanged this week except Essel Mining which announced a price cut in fines by INR 1,000/t towards the end of the week.
Key highlights:
- Odisha’s Essel Mining has lowered its offer for iron ore fines from 30 May’21, sources informed SteelMint. The revised offer for fines (Fe 62%) stands at INR 8,400/t (ex-mines, including royalty, DMF & NMET). Prices have come down by INR 1,000/t against its last offer on 11 May’21. Notably, Essel’s lease for the Nuagoan, Kadodiha mine will expire towards end-Aug’21.
- Sarda Mines was not seen offering material in the market today. The Joint Director of Mines, Joda, has instructed Sarda Mines not to exceed the pro-rata limit of production from the Thakurani Block-B iron mines in Keonjhar district of Odisha before its expiry on 13 Aug’21, according to a copy of the letter accessed by SteelMint.
- The Ministry of Mines has issued a clarification to the Odisha government confirming the permission granted to SAIL for sale of 25% of the minerals produced in the previous year under MMDR Act, 1957. Also, SAIL will be allowed to sell 50% of current year’s production as per the provisions of the newly-introduced section 8A (7A) of MMDR Act. For minerals sales taking place after 28 Mar’21, however, SAIL has to pay the applicable additional charge as per the 6th Schedule of the MMDR Amendment Act, 2021.
Recent trades & rationale:
- SAIL conducted for 136,000 t of fines (Fe 62.5%) from its Bolani mine in Odisha on 25 May’21. The entire quantity offered at the auction received bids at INR 9,000-9010/t, (loaded, including Royalty, DMF, NMET as well as the additional amount as mentioned in the MMDR Amendment Act, 2021). The deal was considered for price calculation under T1 trade therefore kept the 50% weightage.
- SteelMint has also received eight (08) offers, indicative prices under T2 trade in this publishing window and seven (07) were taken into consideration and given another 50%* weightage. To see SteelMint’s iron ore assessments, pricing methodology and specification documents Click here
Market participants highlighted that offers remained unchanged for lump (5-18mm) at INR 12,500-12,700/t exw. There could be a shortage of iron ore in the merchant market as two of the major miners are due for expire in Aug’21.
Odisha iron ore offers:
Chhattisgarh:
NMDC’s iron ore auction receives active participation – National Mineral Development Corporation (NMDC) conducted iron ore auctions today for 151,200 t each from its Bacheli and Kirandul mines in Chhattisgarh. The auction received active participation with nearly 90% ore getting booked. Bids for DR CLO moved up by around INR 570/t and that for fines & lump by upto INR 180/t, sources reported to SteelMint. As per the sources, Electrosteel (Jharkhand) bought 3 rakes ( two rakes fines and one DRCLO) of iron ore in today’s auction from NMDC.
SAIL’s iron ore e-auction from CG fetched no response – Steel Authority of India Ltd (SAIL) conducted an auction today for 40,000 t of iron ore fines & tailings (Fe 51.1-57.8%) from its Dalli & Rajhara mines in Chhattisgarh. The auction failed to receive response, SteelMint gathered from sources.
Goa:
Chief Minister of Goa Pramod Sawant has announced that the process to set up the Goa Mining Development Corporation to resume iron ore mining in the state has already been initiated, as per latest reports. Meanwhile, the state’s Law Department has vetted an MoU signed between the Director of Mines and Geology and the Mineral Exploration Corporation Ltd to identify new iron ore mines in Goa. The proposed Corporation will facilitate resumption of mining activity which remains suspended since Mar’18 after the Supreme Court quashed the second renewal of 88 mining leases.
Karnataka:
NMDC’s Kumaraswamy iron ore mines recently conducted an e-auction on 25 May’21, as per SteelMint reports. Out of the total quantity of 147,000 t put to auction, 139,000 t received bids. JSW Steel remained the largest buyer at 112,000 t followed by Kirloskar Ferrous Industries Limited and Vedanta Limited at 8,000 t each. Iron ore lump (Fe 62.8%) lots were booked at INR 6,794-6,814/t (basic, plus taxes)- largely stable against the last auction on 13 May’21.
Note: * correction: It was earlier written as 500% which has been corrected to 50%
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