 "High floor prices at Odisha mining auctions repel buyers")
Despite repeated pleas by user industries, OMC refused to budge from its stand to lower base price, dampening its sales.
The floor price for lumpy ore stood in the range of Rs 2,200-2,350 per tonne. For iron ore fines, the rate remained unchanged at Rs 1,500 a tonne (for high grade fines with 64 per cent Fe).
OMC offered 516,000 tonne of iron ore lumps at the auction drawn from its Koira, Daitari, Barbil and Gandhamardhan mines. Of this, the booked quantity was only 224,000 tonne, meaning success of only 43 per cent. OMC failed to find takers for calibrated lump ore offered from its Barbil and Gandhamardhan mines.
In case of iron ore fines, the auctions turned out to be a complete fiasco. OMC failed to find a buyer for 219,000 tonne of fines.
"OMC need to follow the market trend and reduce base prices at its auctions. They cannot stick to high prices when the steel companies are bleeding. The base price for iron ore fines needs to be corrected to Rs 1,000 a tonne while that of lumps should be fixed at Rs 1,800 per tonne", said Anil Ahuja, executive vice president, Bhushan Steel.
Analysts feel domestic ore producers are not correcting prices despite contrary market trends.
Pukhraj Sethiya, associate director- energy (coal & mining) at PricewaterhouseCoopers said, "Global iron ore prices are still soft while key producers have increased prices by marginal amount in India. With soft steel prices and global supply surplus, Indian steel players are finding it challenging to produce and compete in market. Iron ore prices in India need correction to move in line with global market for Indian steel to remain competitive."
Leading iron ore producer National Mineral Development Corporation (NMDC) has marginally slashed lumps prices by Rs 80-100 per tonne but has hiked fines rates by Rs 100 a tonne. NMDC has pegged rate of lumpy ore at Rs 2,400 per tonne and that of fines at Rs 1,560 a tonne.