Entire quantity booked in OMC's iron ore auction; bids rise significantly

Odisha's state-owned miner- Odisha Mining Corporation (OMC) had scheduled iron ore e-auction today (3rd Sep'20). for 492,000 t. The auction received an overwhelming response as the entire quantity has been booked along with hike in bids upto 119%.

The auction was conducted for 492,000 MT iron ore, out of which 474,000 t was iron ore fines and remaining 18,000 t was lumps. The miner had increased the base price by INR 300/t against last auction held in Jul'20.

Factors driving Indian iron ore prices are -

• OMC is one of the largest merchant iron ore producers in the state of Odisha, which is functional, with an annual production of over 12 mnt pa.
  
  
• Odisha government auctioned 19 merchant iron ore mines before Mar'20. These 19 mines produced around 71 mnt in FY20.
  
  
• As of now, 14 mines out of 19 mines have not started production, creating a production loss of around 4 mn t per month
  
  
• Total production from 5 auctioned mines (4 mines of JSW and 1 mine of AMNS) was at 1.5 mn t during Apr-Jul'20 against target production of 17.4 mn t pa
  
  
• Odisha government has issued notice to mines for not dispatching 80% of the last two years production, as a part lease agreement.
  
  
• SteelMint's Odisha iron ore index towards closing of last week stood at - 5-18mm (Fe 63%) at INR 5,500-5,600/t; 10-30 mm (Fe 63%) at INR 5,000-5,100/t and that for fines (Fe 63%) at INR 2,900-3,000/t ex-mines, including royalty, DMF & NMET