India: Odisha's Essel Mining Hikes Iron Ore Price

Essel Mining - a major iron ore mine in Odisha has increased its offers for iron ore lumps by INR 300/MT (USD 4/MT) and INR 250/MT in fines (USD 3.5/MT) w.e.f yesterday (23rdd May'19).

According to sources, after the price increased, its Jilling mines for 65% Fe calibrated iron ore lumps (5-18mm) stands at Rs 5,625/MT (USD 80/MT ) and 10-30mm stands at INR 5,225/MT (USD 75/MT) including royalty and taxes on FoR basis.

Current prices of fines (Fe 63% from Jilling mines) is assessed at INR 2,795/MT (FoR Basis).
Since last week, Odisha major miners like Rungta Mines, Serajuddin Mines, RP Sao, KJS Ahluwalia, KN Ram and raised offers.

SteelMint's reference price assessment for Odisha stands at INR 4,000-4,300/MT (ex-mines) for 5-18mm and INR 2,000-2,200/MT for fines Fe 63%.

Which all factors resulted hike in Odisha iron ore prices?

1. Hike in pellet offers - Domestic pellet offers in central and eastern India are hovering at 3-month high amid increased export deals. SteelMint's assessment for Indian pellet export price has gone up by USD 7/MT in last one month.

2. Global iron ore price hike-The rise in global iron ore price has favored domestic price hike. Spot iron ore fines Fe 62% index has picked up and hit 5 years high as the prices were last seen in May'14.

3. Increase in iron ore exports from India - Indian iron ore export volumes increased by 14% to 1.36 MnT as against 1.19 MnT in Mar'19. As per the SteelMint sources, low-grade iron ore fines (Fe58/57%) price is currently assessed at USD 70/MT, CFR China.

Essel Mining production increased sharply in the last fiscal year

Essel Mining has shown very promising growth and depicted a sharp increase in iron ore production to at 8.64 MnT in FY'19, up more than 2 times as compared to 3.7 MnT in FY'18. The miner resumed operations at its Jilling Langalota mines after it received permission from Supreme Court in Feb'18. The company owns mines in Odisha.