SteelMint: Odisha iron ore fines index remains rangebound post OMC auctions

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index stood at INR 5,400/t ex-mines. The state-owned miner, Odisha Mining Corporation (OMC), conducted an iron ore auction on 16 February, 2023. Out of 574,000 t of fines put up for auction, 559,000 t or 97% of the total quantity received bids. The bid price for fines increased by up to INR 1,100/t against the last auction on 17 January.

After the auctions, most merchant miners have kept their offers on hold and are likely to open fresh offers next week. Eastern India-based pellet players already lifted offers sharply post OMC’s auction. Prices of iron ore fines, the main component for pellet-making, increased sharply. This in turn, pushed up prices of pellets.

Rationale:

• T1- Two lots of fines (Fe 62%) from OMC’s Daitari and Koira mines were considered for index computation and given 50% weightage.
• T2- SteelMint has included seven (7) offers and indicative prices under T2 trade deals in this publishing window. Out of this, six (6) were taken into consideration and given 50% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here.

India iron ore prices:

Highlights from other states:

• 126,000 t of iron ore booked at NMDC’s Chhattisgarh auction: NMDC conducted an auction for 222,600 t of iron ore from its Bacheli mines in Chhattisgarh on 17 February. 21,000 t of DRCLO (10-40mm, Fe67%) were booked at INR 5,864-5,874/t and 105,000 t of Bacheli fines (Fe64%) were booked at INR 3,960-3,970/t. However, ROM remained unsold. All prices exclude royalty, DMF, and NMET charges.
• Karnataka e-auctions receive decent response: Vedanta conducted an auction for sale of 16,000 t of iron ore lumps (Fe57%) from its A. Narrain mines in Karnataka’s Chitradurga district on 15 February. According to sources, the entire quantity was booked at the floor price of INR 3,726/t. The price was exclusive of royalty, DMF, and NMET charges. Meanwhile, U.Krishna Prasad auctioned 16,000 t of iron ore fines on 13 February out of which 8,000 t (Fe64.04%) were booked at the base price of INR 4,725/t.