India: OMC Keeps Iron Ore Base Prices Unchanged for Upcoming E-auction
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Odisha Mining Corporation (OMC) - a state-owned miner is to conduct next e-auction for 295,523 MT iron ore fines and CLO on 05th Nov'18. The material put under the hammer is from Gandhamardan, Daitari, Koira and Raikela mines. No traders shall be allowed to take part in the e-auction.
The base prices for fines remain unchanged against the previous e-auction held on 05 Sep'18. However if we compare to bid prices fetched in previous e-auction, base prices are lower by INR 100-200/MT.
Out of the total quantity, 294,000 MT is fines and remaining 1,523 MT is CLO. The base price for fines offered from Daitari, Gandhamardan and Koira mines remains stable at INR 2400/MT, INR 1300/MT and INR 1150/MT respectively as against last fines auction held on 5th Sep'18. The base price for CLO offered from Raikela mines is at INR 5,178/MT.
Odisha based merchant miners had announced three successive price hikes in Aug'18 and early September which made Odisha iron ore prices to hover close to 6 years high. However, later miner started offering discounts to buyers of around INR 300-400/MT varying as per the quantity of purchase.
Miners had kept prices unchanged except Essel Mining which had reduced offers by INR 300/MT. However amid less buying interest, miners are heard to have further increased discounts by INR 100-200/MT in October over announced offers.
Price comparison of OMC iron ore e-auctions-
| Mines | Size | Fe (%) | Base Price as on 09th July'18 | Base Price as on 05th Sept'18 | Bid Price as on 05th Sept'18 | Base Price as on 05th Nov'18 | Quantity |
| (mm) | (INR/MT) | (INR/MT) | (INR/MT) | (INR/MT) | (MT) | ||
| Gandhamardan | -10 | 60-62 | 1,100 | 1,300 | 1,500 | 1,300 | 90,000 |
| Kurmitar (Koira) | -10 | 62-60 | 850 | 1,150 | 1,250-1,300 | 1,150 | 90,000 |
| Daitari | -10 | 64-62 | 2,080 | 2,400 | 2,500 | 2,400 | 114,000 |
| Raikela | 10-40 | 62 | - | - | - | 5,178 | 1,523 |
| Total | 295,523 | ||||||
Base prices in INR/MT on ex-mines basis; including royalty
Source: SteelMint Research
OMC recorded iron ore production of 4.59 MnT in H1 FY19 and aims to produce 9.7 MnT iron ore in FY19. In FY18, the miner recorded production of 7.92 MnT. The miner is planning to increase iron ore production in the coming years from its mines.
