The Odisha Mining Corporation (OMC), which has about 10 per cent market share in Indian iron ore trade, has slashed sized iron ore rates of different grade by Rs 200 to Rs 400 per tonne for the July-September quarter.
The state-run trading agency cut prices of ore with 62 per cent iron content in Koira circle to Rs 5,606 per tonne per tonne, lower than Rs 6,002 per tonne in Apr-June period. Similarly, the rate of 65 per cent grade iron ore has been slashed to Rs 7,404 a tonne, against Rs 7,611 in the previous quarter.
It announced Rs 4,311 per tonne for Barbil sector ore having 62 per cent iron content for the first time in the current financial year, as it could not sell iron ore from the area in the first quarter. For Gandhamardan sector, the mineral trader set prices between Rs 4,500 to Rs 6,700 per tonne, lower than Rs 400 to Rs 500 per tonne compared to prices announced in the first quarter.
OMC decides prices of iron ore every quarter through a tender process. It invites bid from interested buyer for selling a fraction of its total salable quantity, and fixes prices of rest of the quantity as per average prices of bidding. For July-September period. OMC had invited bid for 88,000 tonne iron ore of different grade.
Most Indian sponge iron makers and steel plants use sized iron ore as they are yet to process iron ore fines on large scale basis. The rates of sized iron ore have been hit by falling demand for pellets and higher steel scrap import. Other private miners in the state have already cut sized ore rates on poor demand.
Rates of iron ore lump and pellets generally move in tandem, as pellets are considered alternative to calibrated lump ores. Similarly, steel makers often use imported steel scrap and sponge iron alternatively.
Industry sources said pellet plants in India have restricted fines procurement, anticipating a drop in domestic demand especially from the real estate sector due to the ongoing monsoon season, when construction activities dissipate.
Besides, higher steel scrap import in the April-May period has also affected demand for the intermediate steel products such as sponge iron, pig iron and billets and thus has pressurised sized ore prices, they said. Currently, Indian iron ore fines are offered at $121 per tonne at port side, 4.7 per cent less than the rates quoted a month ago on poor international demand.
