Iron Ore prices on the rise due to lower production

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Bhubaneswar:  Iron Ore prices in Odisha have continued to rise due to tight supply. While state owned miner OMC has raised the base price of its Iron Ore for the upcoming e-auction on 3rd November, several private miners have also hiked their Iron Ore prices.

OMC has raised Iron Ore base price by Rs.200/ tonne against the base price fixed in the September auction. On the other hand leading private miners Rungta and Essel Mining have increased Iron ore prices in the Range of Rs.250 to 300 per tonne. After this hike, Rungta mine’s revised offer for Fe62 grade stands at Rs.4250/ tonne and Essel’s revised offer for the same grade stands at Rs.3775 per tonne.

While the latest iron ore production details are not available, it is likely to be low with 14 of the 19 auctioned Odisha mines yet to begin operations and steel production gradually ramping-up.

India’s iron ore production marginally declined to 13.5MT in August 2020 from 14MT in July 2020, but was 18% yoy lower in August 2020. The drop in Iron Ore production is mainly due to lower production in Odisha, the largest Iron Ore producer in the country.  As many as, 14 of the 19 Iron Ore mines auctioned by the Odisha government last February are yet to commence operations resulting lower Iron Ore production in the state.

The lower production levels have contributed towards the higher iron ore prices which were at Rs. 3,160/MT (NMDC; 0-10mm, Fe64%) in mid-October 2020, up 6.7% mom and up 46% on a quarter-on-quarter basis.

(With inputs from IndRa)

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