India: OMC Chrome Ore Auction Receives Moderate Response

Odisha Mining Corporation (OMC) conducted the e-auction on 27 Feb'2020. The auction received a moderate response, as almost the entire quantity was booked at approximately only 6.8% higher than the base price. Although, all the material from South Kaliapani mines were totally booked the response received was much lower than that in the past two months. The major highlights and the response by the market insiders on the Auction are as under:

1) OMC offered 33,100 MT Chrome Ore for the auction, of which 32,200MT Friable Chrome Ore was from South Kaliapani Chromite Mines and 500 MT from Sukrangi Chromite Mines.

2) OMC marginally increased its base prices by up to 1.67% M-o-M for the Jan 2020 auctions.

3) Post- Auctions, few market experts commented that past two auctions received highly aggressive bidding due to tension over possible supply disruptions of Chrome Ore with the expiry of merchant mining leases. However, most of the producers have sufficient inventory and due to the down-trending Ferro Chrome market, they are unwilling to take any further risk of overstocking.

4) Meanwhile, a major Indian Ferro Chrome producer shared that due to Coronavirus threat, major importing countries are on the back foot. China was already out of the market and now due to the spread of Coronavirus in Italy, the possibility is Europe would also be a setback.

The grade-wise auction results of Chrome ore with respective Base Price and quantities from both the mines is as summarized below for ready reference.