Chrome ore firms up in auction, rises over 50%

Chrome ore prices rose sharply in the latest auction conducted by the Odisha Mining Corporation (OMC), the state government-run mining company, due to ferrochrome supply problems in international markets and ore supply issues in the domestic market, sources said.

The prices of the mineral shot up 50 per cent for all categories of ores, offered by OMC in the auction that took place in the second week of February, in stark contrast with the 11-12 per cent fall seen in the December auction.

International factors such as slump in ferrochrome output in the world's second-largest producer South Africa, due to power problems there and rise in global chrome ore rates, influenced the rates, trade sources said.

In the December auction, OMC had few takers for 56,000 tonnes of chrome concentrate marked for sale. And nearly 6,000 tonnes friable ore remained unsold out of 92,000 tonnes of the ore for auction. But in the February 16 auction, all of the material offered by OMC was sold out.

This time, it had offered 92,300 tonnes friable ore with the highest quantity belonging to 52 grade ore and 66,900 tonnes concentrated ore for sale. Of the 92,300 tonnes of friable ore, 70 per cent was reserved for state-based units.

The price of the 54 grade chrome ore went up to Rs 17,073 a tonne, against Rs 11,087 a tonne in December. This is a jump of 54 per cent. Ore having 52 per cent chrome content surged to Rs 17,279 a tonne , 64 per cent up from the previous rate. The price strides in chrome ore concentrates were however, smaller. Concentrates of 46-48 grade were bid for Rs 11,090 a tonne against Rs 9,340 in the previous online auction. The 42-44 grade fetched the highest rate of Rs 9,096. This is up 28 per cent from the December auction rate.

Nearly all of India's chrome ore is produced in Odisha, with OMC having control of more than a third of the total production. It sells chrome ore only to local plants having captive use of the mineral.