Odisha Mining Corporation to lower iron ore rates by 15%

Odisha Mining Corporation (OMC), which will publish rates for sized iron ore for October-December period by the end of this week,  may lower the rates by 12 to 15 % because of poor demand, said traders and secondary steel makers.

For July-September period, rates of sized iron ore were between Rs 4,500 to Rs 5,600 per tonne for 62 grade and for 65 grade, the prices was fixed at Rs 6,700 to Rs 7,400 a tonne.

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, biddings were lower by 12-15 % and hope the Odisha government-owned miner would slash the rates.

"The iron ore rates must 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 is likely that it will lower the rates,” said a Rourkela-based sponge iron maker without wishing to be named as he took part in the bidding.

Iron ore rates have fallen sharply in global markets ,following 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 due to poor demand. National Mineral Development Corporation (NMDC), India's largest miner, recently reduced rates by 2 to 11 % due to sluggish demand from steel sector.

Steel makers also feel that OMC will have to cut rates.

"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 I think they will cut the rates,” said P L Kandoi, president of All Odisha Steel Federation.
 
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.