India: SAIL records sales of over 360,000 t at iron ore auctions in Feb'22

Iron ore auctions conducted by PSU steelmaker SAIL in Feb'22 witnessed a sharp surge in sales month-on-month, with over 360,000 tonnes (t) of iron ore fines and concentrates receiving bids at auctions out of the total allocation of over 0.5 million tonne (mnt). Therefore, over 65% of the auctioned material got booked.

In Jan, sales had fallen to just 8,000 t. Poor interest at auctions in Jan was because of general lack of interest in low-grade iron ore. Moreover, SAIL increased allocations from its mines in Odisha in Feb. Buying interest seems to have picked up since the last week of Jan on rising steel and iron ore pellets prices. Owing to some technical glitches and installing of new equipment's, the iron ore availability was low from SAIL's Odisha mines due to which allocations in Jan'22 were low.

However, later in the month, waw material handling plant (RMHP) of SAIL's ISP had installed an electro-magnetic separator at the reclamation route of the ore handling plant area in the flux dispatch circuit which was facing issues during flux Crushing operation. This resulted in increased allocations in Feb'22.

Only small quantities of high-grade concentrates (Fe 64.53%) were allocated at auctions from Chhattisgarh, while just about 40,000 t of Fe 62.5% fines from the company's Bolani mines in Odisha received bids at an auction for 76,000 t. Total sales of tailings and dump fines stood at 200,000 t.

Price scenario

Standard to high-grade iron ore fetched high prices at the auctions, especially because of the relatively tight supplies of high-grade material in Odisha.

An auction from Bolani for Fe 62.5% fines on 24 Feb received bids at INR 6,840/t ex-mines including royalty, DMF, NMET, which was considerably higher than INR 5,990/t ex-mines including royalty, DMF, NMET that similar grade material from the Bolani mines received at an auction on 25 Jan.

Overall hike in iron ore lump prices has been observed after OMC's lump auction on 16 Feb. Iron ore fines prices have also gained support on higher pellets and steel prices amid tight supply of high-grade ore. SteelMint's Odisha index for Fe 62% fines was assessed at INR 6,500/t on 5 March.