India: Bid prices surge in OMC's iron ore lump e-auction

Odisha's state-owned miner- Odisha Mining Corporation (OMC) had scheduled iron ore e-auction today (2nd Dec'20) for 910,000 t iron ore lumps. The auction received an overwhelming response with the entire quantity of 910,000 t being booked with hike in bids upto INR 3,800/t. The miner had increased the base price by upto INR 1,600/t against last auction's base price held in Oct '20. The material put under the hammer was from Gandhamardan, Daitari, Koira mines and Tiring pahar mines.

OMC iron ore lump e-auction

Base prices in INR/t on ex-mines basis; including royalty
Source: SteelMint Research

SteelMint analysis

• SteelMint's index for 10-30mm lump (Fe 63%) was recorded at INR 8,000/t ex-mines, (including Royalty, DMF & NMET) as on 28 Nov'20. Prices increased by INR 2,300-2,400/t m-o-m. Merchant miners in Odisha have already been taking consecutive price hikes citing tighter domestic supplies.
  
  
• OMC's iron ore production has picked up to 0.88 mn t in Oct'20 as against 0.62 mn t in Sep'20 due to resumption in production from its Gandhamardhan B block and commencement of operations at Tiring Pahar.
  
  
• OMC has recorded steady growth in iron ore production over the past years from 6 mn t in FY'16 to 12.4 mn t in FY'20.
  
  
• JSW Steel has scheduled an auction for 300,000 t iron ore (run of mines) from its Nuagaon and Jajang mines in Odisha on 10 Dec'20. JSW Steel has produced total of 1.89 mn t iron ore from its Odisha and Karnataka mines in Oct'20, up by 9% m-o-m, according to the data maintained with SteelMint. The miner produced 1.34 mn t from Odisha mines which it recently won in auctions and 0.55 mn t from Karnataka mines. Trade sources expect active participation in it.