India: Iron ore fines prices in Odisha remain stable w-o-w

• Pellet prices under pressure in Barbil
  
  
• Lack of high-grade fines offers seen
  
  
• Buyers on the sidelines post-OMC auction
  
  

BigMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 4,950/t ($59/t) ex-mines on 27 April 2024. A deal of 10,000 t Fe62% grade from merchant miners was concluded this week at INR 4,900/t ($59/t) ex-mines.

Iron ore offers remained supportive in this publishing window amid price hikes announced by miners for both fines and lumps. However, there was a lack of material availability for high-grade ore, as only a few miners offered Fe62+% material in the merchant market.

A buyer said: "There was a price hike by the miners earlier this week after the decent premium in the OMC auction. However, pellet offers increased but bid-offer disparity weighed on deals, and due to this buyers remain reluctant in booking material at higher offers. Sponge iron and finished steel prices also dropped this week."

The miners are waiting for buyers' bids as they received sluggish response from buyers after OMC's auction. Pellet prices are trading high in Barbil which pushed prices for lumps higher despite drop in sponge iron prices w-o-w.

An Odisha-based miner said, "We have increased iron ore offers after the OMC auction. But the pellet market showed a downward movement as there was a gap between bids and offers which impacted iron ore trading activity. The export market has improved slightly which may support iron ore prices in the near term."

Buyers booked to meet immediate requirements in OMC's auction. However, they will restock the material before monsoon season and are currently waiting for prices to drop. Following the current market dynamic, prices in the near term will depend on pellet, sponge iron and steel prices.

NMDC increased list prices of iron ore fines and calibrated lump ore today by INR 200/t and INR 300/t respectively, BigMint learnt from credible sources. The company's prices are effective from 27 April. The miner has fixed prices of DR CLO (10-40mm, Fe67%) at INR 7,270/t and iron ore fines (-10mm, Fe64%) at INR 5,260/t (on FOR basis from its Bacheli complex). Prices include royalty, DMF and NMET charges.

Rational:

• T1- One (1) deal was recorded in this publishing window and taken for price computation. These wergiven 50% weightage for index calculation.
  
  
• T2- BigMint received twenty nine (29) offers and indicative prices under T2 trade deals in this publishing window. Twenty three (23) were taken into consideration and given 50% 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 fell by around INR 100/t ($1/t) w-o-w. The current assessment stands at INR 8,250/t ($99/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable w-o-w at INR 9,450/t ($115/t) exw on 26 April. Meanwhile, BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased by $2/tonne (t) w-o-w to $105/t on 24 April.
  
  
• Export offers stable: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $0.5/t w-o-w to $65.5/t FOB east coast on 25 April 2024. One deal of 55,000 t was recently heard for standard Fe 57% fines at $72/t FOB India from the Vizag port. Another eastern India-based miner sold around 110,000 t iron ore fines (Fe54%) earlier this week at a 34% discount on the IODEX index around $63-65/t CFR China. Few sellers' deals were under negotiation and there was only a $2-3/t disparity seen in the market.
  
  
• Sponge iron prices drop in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 850/t ($10/t)w-o-w to INR 29,600/t ($357/t) today. Meanwhile, steel billet (100*100 mm) prices in Rourkela surged by INR 1,050/t ($13/t)w-o-w to INR 42,550/t ($510/t) today.
  
  

Outlook

Iron ore offers in Odisha are expected to remain range-bound post OMC auction. However, other Odisha-based miners said that they may raise offers.