India: Odisha iron ore prices remain stable, Buyers eye on today's OMC auction

• Around 3.5 mnt iron ore bids start in today's OMC auction
  
  
• Fall in sponge iron and semi-finished price keep market under pressure
  
  

Iron ore prices in the Odisha region remained largely stable this week, ending on 18 April, as market participants adopted a cautious stance ahead of the Odisha Mining Corporation (OMC) auction scheduled for today. Activity in the spot market was moderate, with steelmakers limiting their purchases and largely relying on the upcoming auction to secure bulk volumes.

Price update

BigMint's Odisha iron ore fines (Fe 62%) index remained unchanged w-o-w at INR 5,750/t ($62/t) ex-mines on Saturday (18 April). It recorded deals for around 400,000 t this week, concluded directly by steelmakers with private miners and traders.

A few deals were concluded in the iron ore auction via SAIL this week. Around 72,000 t of iron ore was sold in auctions by the miner this week.

OMC scheduled an auction for 3.412 mnt of iron ore (1.44 mnt lumps and 1.972 mnt fines) today. The miner has increased base prices of lumps by INR 500/t, while fines prices rose by up to INR 250/t m-o-m. The upward revision follows similar price hikes by NMDC and Lloyds Metals by INR 450-550/t, reflecting improved market sentiment. OMC has restricted the participation of traders in e-auctions.

Market highlights

According to market participants, steelmakers concluded only need-based transactions during the week, anticipating better clarity on pricing trends post the OMC auction. A trader said, "Most buyers stayed on the sidelines and preferred to wait for the auction outcome, where bulk procurement decisions are likely to be finalized."

OMC has reportedly increased its base prices for the auction; however, market sources believe that the premium over the base price could soften compared to last month. A steelmaker commented, "While the base price hike indicates firmness in the market, actual realization will depend on bidding behavior. Premiums may not be as aggressive due to weak downstream demand."

The broader market sentiment remains under pressure as prices of pellets, sponge iron, and semi-finished steel continue to decline. This has impacted overall liquidity and made buyers cautious in committing to higher-priced raw materials. Another steel producer informed, "There is a clear mismatch as iron ore prices are relatively elevated, but finished steel prices are falling. This is squeezing margins and affecting buying appetite."

Additionally, OMCs restrictions on trader participation have added to the uncertainty, limiting speculative activity and keeping the market largely demand-driven. However, some buyers have started preparing for monsoon restocking, viewing the current auction cycle as a key opportunity to secure inventory.

Miners indicated that they managed to conclude some deals during the week and may revise their offers based on auction outcomes and evolving market sentiment. A miner noted, "We expect clearer price direction next week once auction results are out."

One miner stated, "We sold bulk volume at the beginning of this month for April delivery. Now, after the OMC auction, we may revise iron ore offers and start taking orders for next month's liftings."

Factors affecting iron ore prices

Pellet prices show down trend: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil dropped by INR 200/t w-o-w to INR 9,000/t ($97/t) loaded to wagon on 17 April. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur fell by INR 100/t to INR 10,100/t ($109/t) exw.

Sponge iron prices decline w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 1,000/t ($11/t) w-o-w to INR 28,000/t ($302/t) on 18 April.

Billet prices drop w-o-w: Meanwhile, steel billet (100*100 mm) prices in Rourkela decreased by INR 850/t ($9/t) w-o-w to INR 41,800/t ($443/t) on 18 April.

Rationale

• T1- Four (4) deals for Fe 62% fines were recorded in the publishing window, and two (2) was considered for price computation. These were given 50% weightage for index calculation.
  
  
• T2 - BigMint received twenty (20) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Eighteen (18) were taken into consideration and given 50% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document, click here.
  
  

Outlook

As per market inputs and BigMint analysis, iron ore prices in the eastern region are expected to remain volatile in the near term, with a potential softening trend driven by cost pressures faced by steelmakers.