India: OMC to auction 0.8 mn t iron ore fines, lowers base price

State-owned miner Odisha Mining Corporation (OMC) has scheduled an iron ore fines auction for 23 Aug'21.

The miner has put a total of 866,000 t of iron ore fines to auction. The base price for higher grade fines has come down by up to INR 700/t while that of low grade has come down by INR 1,350/t against OMC's Jul'21 auction.

OMC's last iron ore fines auction held on 22 Jul'21 received a tepid response, with only 117,000 t of the material getting booked against the total quantity of 689,000 t up for auction.

SteelMint's weekly Odisha iron ore fines (Fe 62%) index fell by around INR 200/t to INR 8,500/t (ex-mines, including royalty, DMF and NMET) on 14 Aug'21. Market participants expect further correction in prices in the near-term due to limited buying at current offers and decline in pellet prices. A few bulk buyers expect a price correction of INR 500-1,000/t in Odisha iron ore fines offers in the coming days.

With 13.3 mn t of iron ore production in FY'21, OMC had emerged as the leading merchant miner in Odisha. The state PSU miner could also emerge as the largest iron ore producer in Odisha with a consolidated capacity of 34 mn t/year, as per SteelMint estimates, especially after it bagged key iron ore mines following months of non-production subsequent to the Odisha auctions in 2020.

OMC reserves about 30% of its annual production for auctions, with the rest earmarked for long-term linkage customers.