India: Iron ore concentrate prices inch down, market awaits OMC's auction results

• Buyers' bids continue to drop
  
  
• OMC's base price cut weigh on offers
  
  
• Market awaits OMC auction for price clarity
  
  

Iron ore concentrate prices in Jabalpur, central India, continued its downward trend. Falling bids from buyers' side, Odisha Mining Corporation's (OMC's) recent price cut announcement followed by subdued response in National Mineral Development Corporation's (NMDC's) recent iron ore auction from Chhattisgarh have weighed on iron ore concentrate offers, BigMint noted.

BigMint's bi-weekly index for Fe 63% concentrate currently stands at INR 4,200/t ($50/t) exw, a drop of INR 100/t ($1/t) as against the last assessment on 13 April.

Some offers were still at higher levels of INR 4,500/t ($54/t) exw as they are completing their pending deliveries and are not in a mood to reduce offers, currently.

"We thought that concentrate offers will find some support post-sudden hike in prices of steel, sponge iron and then pellets, but all in vain. Buyers are still asking material at lower levels," mentioned a Jabalpur-based seller.

Another seller from the region told BigMint, "Buyers' bids have not picked up yet. Meanwhile, market is waiting for OMC auction to get better price clarity and expecting a weak response in the miner's auction."

Rationale:

• Two (2) trades amounting to a total of 45,000 t were recorded in this publishing window and all were considered under T1 trade and were accorded with a 50% weightage
  
  
• Nine (9) offers and indicative prices were reported, out of which, six (6) were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Factors weighing on concentrate offers:

• OMC ore base price cut announcement: OMC has scheduled an auction for 3 million tonnes (mnt) of iron ore (1.828 mnt of fines and 1.177 mnt of lumps) on 19 April, 2024. The miner has reduced the base price m-o-m by INR 200-300/t for fines.
  
  
• Subdued response in NMDC's CG auction: NMDC conducted an auction for over 175,000 t of iron ore from Chhattisgarh on 12 April, 2024. From Bacheli mines, 33,600 t of DR-CLO (10-40 mm, Fe 67%) were booked at base price of INR 7,025/t ($84/t) while out of 92,400 t of iron ore fines (Fe 64%), around 46,000 t were booked at base price of INR 5,100/t ($61/t). Meanwhile, majority of ROM lots remained unsold while 42,000 t of ROM remained unsold from Kirandul mines.
  
  
• Odisha iron ore prices remain unchanged w-o-w: BigMint's weekly Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 4,600/t ($55/t) ex-mines on 13 April, 2024. However, buying activity remained subdued as market participants waited for the OMC iron ore auction to get more price clarity in the market.
  
  

Outlook

Iron ore concentrate offers are expected to remain under pressure as bids by buyers have dropped amid price cut expectations in recent deals. However, recovery in pellet prices might provide some support to iron ore concentrate offers.