India: Odisha iron ore fines index largely stable amid supportive market sentiments

Outlook

Iron ore offers in Odisha are expected to remain supportive in the near term on the expectation of active buying to meet restocking needs ahead of the onset of monsoons.

• Iron ore fines prices stable, lumps rise
  
  
• Around 200,000 t of iron ore deals recorded in Odisha
  
  
• Sponge iron prices rise by up to INR 1,000/t w-o-w
  
  

BigMint's weekly Odisha iron ore fines (Fe 62%) index inched up by INR 50/t to INR 5,000/t ($60/t) ex-mines on 4 May, 2024. No deals of Fe 62% grade from merchant miners were recorded this week. However, BigMint recorded around 200,000 t of iron ore (fines and lumps) deals from Odisha this week amid supportive price sentiments.

Iron ore offers remained supported amid positive steel prices in the central and eastern regions. A few big steelmakers have started restocking in view of the approaching monsoon season and they booked decent quantities of iron ore from Odisha-based miners.

A steelmaker said: "Iron ore prices trended upward following price hikes in the downstream steel segment. Meanwhile, buying demand remained moderate with a few iron ore deals recorded by merchant miners. Some miners sold higher-grade lumps to steelmakers at decent offers. However, only a few miners offered high-grade fines in the market".

Some buyers remained in wait-and-watch mode as they had already procured enough material in OMC auctions.

An Odisha-based miner said, "Iron ore inquiries from buyers remained decent this week with some deals concluded at current offers. However, aggressive buying was absent as buyers booked only a few lots. On the other hand, the acceptance of offers by steelmakers is still not there despite the prices of other commodities increasing sharply during the week".

Pellet prices across India region increased around INR 500/t ($6/t) over the last two weeks amid active deals that lifted iron ore prices in the region. A sharp increase in the sponge iron prices contributed to the increase in lumps prices.

Rationale:

• T1- No deal was recorded in this publishing window and not taken for price computation. These were given 0% weightage for index calculation.
  
  
• T2- BigMint received twenty-six (26) offers and indicative prices under T2 trade deals in this publishing window. Twenty-two (22) were taken into consideration and given 100% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document Click here.
  
  

Factors affecting prices-

• Domestic pellet offers range-bound: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil remained unchanged w-o-w. The current assessment stands at INR 8,600/t ($103/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained largely stable w-o-w at INR 9,500/t ($115/t) exw on 3 May. Meanwhile, BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased by $1/tonne (t) w-o-w to $106/t on 1 May.
  
  
• Fines export offers stable: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $65.5/t FOB east coast on 2 May 2024. Two deals of a total of 105,000 t were recently heard for standard Fe 57% fines at $80-86/t CFR China from the east coast of India. The Chinese buyers remained away from the market due to the weeklong Labor Day holiday.
  
  
• Sponge iron prices rise in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela increased by INR 800/t ($10/t)w-o-w to INR 30,600/t ($367/t) today. Meanwhile, steel billet (100*100 mm) prices in Rourkela surged by INR 1,200/t ($15/t)w-o-w to INR 43,750/t ($525/t) today.
  
  

Outlook

Iron ore offers in Odisha are expected to remain supportive in the near term on the expectation of active buying to meet restocking needs ahead of the onset of monsoons.