India: Iron ore concentrate prices stay stable amid supportive market sentiments
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- Rise in pellets, iron ore prices support offers
- Sellers expect price hike in near term
- Some buyers still hesitant to accept higher offers
Iron ore concentrate prices in Jabalpur, central India, remained stable this week. Supportive sentiments from pellet and Odisha iron ore market along with decent trades have kept concentrate offers supported, BigMint notes.
BigMint's weekly iron ore concentrate index stood at INR 4,500/t ($54/t) exw, stable as against the last assessment on 4 May. Some offers were also heard at a higher level of INR 4,600-4,800/t ($55-57/t) exw. However, no deals were recorded at the above-mentioned levels as deals are continuing to happen at INR 4,500/t ($54/t) exw.
"We are expecting a further hike in offers considering pellet, sponge iron and finished steel market trends. However, buyers are still trying to pull offers lower but there is no logic in decreasing prices," said a Jabalpur-based seller.
Rationale:
- Two (2) trades amounting to a total of 50,000 t were recorded in this publishing window and both were considered under T1 trade and were accorded with a 50% weightage.
- Eight (8) offers and indicative prices were reported and only five (5) were taken into consideration as T2 trades, receiving 50% weightage.
Factors supporting concentrate offers:
- Increase in pellet prices: BigMint's bi-weekly domestic pellet (Fe 63%) index increased by INR 50/t ($1/t) to INR 10,450/t ($125/t) DAP Raipur on 7 May compared to the last assessment on 3 May. The index increased following the hike in pellet prices by Raipur-based producers. Over the last 10 days, Raipur pellet prices have been increased by around INR 700-800/t. Godawari Power & Ispat (GPIL) increased pellet offers for Fe 63.5% and Fe 66% by INR 300/t ($4/t) to INR 10,900/t ($131/t) and INR 12,400/t ($149/t) exw-Raipur respectively on 6 May. Other producers have raised prices by INR 200-300/t ($2-4/t) to INR 10,500-10,600/t ($126-127/t) exw on high demand.
- Odisha iron ore fines prices stable w-o-w: BigMint's weekly Odisha iron ore fines (Fe 62%) index inched up by INR 50/t ($1/t) to INR 5,000/t ($60/t) ex-mines on 4 May, 2024. 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.
- Active participation in NMDC's auction: NMDC conducted an auction for over 223,000 t of iron ore from Chhattisgarh on 2 May. 17,200 t of DR-CLO (10-40 mm, Fe 67%) was booked at a premium of 1%, 17,200 t of ROM (10-150 mm, Fe 65.5%) was booked at the base price and 86,000 t of fines (Fe 64%) at a premium of 0.2%. Prices include royalty, DMF and NMET.
Outlook
Iron ore concentrate offers are expected to remain supported in the near term amid supportive sentiments from pellets and Odisha iron ore market. However, buyers' resistance to increased offers might put pressure on concentrate prices, BigMint understands. However, the upcoming monsoon season may depress demand for concentrates.