Odisha Mining Corporation (OMC) has slashed iron ore lump and fines prices on the back of poor demand amid fall in global and domestic rates. The prices have been cut by 12-14 per cent this time.
For 62 grade iron ore lumps the rates are fixed at Rs 4,805 per tonne, and for 65 grade lump, the state-run miner fixed the rates at Rs 6,514 for Koira sector minerals. In July-September, rates of sized iron ore were fixed at Rs 5,600 per tonne for 62 grade and Rs 7,400 a tonne for 65 grade.
OMC decides iron ore rates by auctioning a fraction of the total salable quantity in every quarter and declares the benchmark rate after arriving at average price. Traders said for the October-December quarter, bid prices were lower by 12-15 % and hence, it had no other option but to slash the rates.
“The iron ore rates had to go down this time as it has fallen everywhere in the country. Because of sharp reduction in rates in last couple of months, OMC was not able to sell a significant amount in the previous quarter and hence, it was expected that it will lower the rates,” said a Rourkela-based sponge iron maker.
Iron ore rates have fallen sharply in global markets, due to weak demand from China. It has affected prices in local markets too.
Many large private miners in Odisha have cut sized ore rates by Rs 500 to Rs 1,000 per tonne in past one month. National Mineral Development Corporation (NMDC), India’s largest miner, recently reduced rates by 2 to 11 per cent due to sluggish demand from the steel industry.
“It has been seen that OMC sometimes chooses to rollover the prices of previous quarter whenever there is lower bidding. But this time situation has changed (poor demand) and hence, they cut the rates,” said P L Kandoi, president of All Odisha Steel Federation.
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OMC controls about a tenth of Odisha’s iron ore trade, and the rest is commanded by private miners such as Rungta Sons and Essel Mining. Many traders track OMC rates to decide the rates of their mineral, which vary from place to place with different chemical properties.
The state is the largest producer of iron ore in the country with over 75 million tonne annual output. Apart from catering to the demand of domestic sponge iron producers, it supplies the raw material to secondary steel makers of West Bengal, Chhatishgarh also.