SteelMint: Odisha iron ore index falls sharply as Essel Mining cuts prices

SteelMint's weekly Odisha iron ore fines (Fe 62%) index has fallen by around INR 400/t to INR 8,800/t (ex-mines, including royalty, DMF and NMET).

Odisha's Essel Mining has lowered offers for iron ore by up to INR 2,000/t today. Prices of lump ore have moved down by INR 2,000/t and that of fines by INR 1,000/t, sources informed SteelMint.

"Prices should come down from the offers assessed earlier in the week at around INR 9,500-9,600/t ex-mines for Fe 62% fines. International prices have gone down and also bids in OMC's iron ore lump auction have fallen against the previous auction in June," a steel mill executive told SteelMint.

Recent trade and rationale:

• No deal was heard this week for fines and, therefore, not considered under T1 trade, being accorded 0% weightage in the index calculation for Fe 62% fines.
  
  
• SteelMint received six (06) offers, indicative prices under T2 trade in this publishing window and three were taken into consideration and given 100% weightage. To check out SteelMint's iron ore assessments, pricing methodology and specification documents Click here
  
  

SteelMint's iron ore lump (5-18mm, Fe 63%) index also fell sharply by around INR 1,700/t to INR 12,400-12,700/t (ex-mines, inclusive of royalty, DMF and NMET). A few deals were heard in this publishing window for around 16,000 t of screened lump (10-40 mm, Fe 62%) at INR 11,000/t (ex-mines, inclusive of royalty, DMF and NMET).

In another deal, a buyer booked around 5,000 t of lumps (5-18mm, Fe 59/60%) at INR 9,100/t ((ex-mines, inclusive of royalty, DMF and NMET).

OMC iron ore lump auction receives modest response

State-owned commercial mining company, Odisha Mining Corporation's (OMC), e-auction for iron ore lumps today received moderate participation, with 507,000 t of iron ore, or 74% of 687,000 t of material on offer, getting booked. The bids in the auction edged lower compared with the last auction held on 2 June'21.

The base price at the auction had been raised by up to INR 2,860/t as against that of the last e-auction.

Odisha's iron ore production falls 10% m-o-m in Jun'21

Odisha, India's largest iron ore producing state, recorded output of 13.36 million tonnes (mn t) in June'21, down by 10%, as against 14.85 mn t in May, according to provisional data from the Odisha government maintained with SteelMint. The production figure includes fines, lumps and iron ore concentrate.

SAIL's Chhattisgarh auction fails to fetch response

Steel Authority of India Ltd (SAIL) had conducted an auction for 104,000 t of iron ore fines and tailings (Fe 60.13%, Fe 52.52%, and Fe 51.11% grades) from its Dalli and Rajhara iron ore mines in Chhattisgarh. According to the latest update from sources, the auction failed to fetch any response. This could be due to the low-grade iron ore being offered, SteelMint notes.

NMDC's auction from Kumaraswamy receives good response

NMDC Kumarswamy mines conducted an iron ore e-auction on 27 July'21 at which 159,000 t was booked out of the total quantity put to auction. JSW Steel Ltd. remained the largest buyer at 82,000 t of iron ore fines followed by Orissa Metaliks Pvt. Ltd. at 20,000 t of iron ore lumps. An iron ore lump (Fe 58.39%) lot was booked at INR 5,616/t (basic, taxes extra), up by INR 310/t as against the previous auction on 13 July'21 where similar grade material was sold at INR 5,306/t.