India: Odisha iron ore fines index remains stable w-o-w amid limited trades

• Slight improvement in pellet, sponge prices w-o-w
  
  
• Active export deals raise demand for low-grade fines
  
  

Iron ore prices in the Odisha region remained largely stable this week, with participants exhibiting a cautious stance toward fresh purchases. Limited buying interest prevailed, driven by weak market sentiments and subdued demand. Adding to this, a material shortage was observed as major miners withheld from offering new supplies, further dampening market activity.

BigMint's Odisha iron ore fines (Fe 62%) index stood unchanged at INR 5,250/t ($62/t) ex-mines on 7 December 2024. Private miners had no offers for iron ore amid uncertainty in the market. Around 150,000 t iron ore deals were recorded this week from the Odisha region.

The recent fluctuations in pellet, sponge iron and iron ore export markets and pending deliveries of previous orders have kept buyers away from bulk bookings, with steelmakers opting for need-based purchasing to maintain raw material inventories.

A prominent steelmaker commented, "With the market sentiment weak, we are focusing only on immediate requirements rather than bulk procurement."

A miner informed BigMint, "Despite the current slowdown, there is optimism for a slight recovery in trading volumes. Improved sponge and steel prices and recent cargo export deals from the East Coast may lend support to domestic iron ore trading in the near term. Volatility remains, but demand could pick up with fresh offers and better export opportunities to China in December"

Rationale

• T1 - No deal of Fe62% fines was recorded in the publishing window and not considered for price computation and was given a 0% weightage for index calculation.
  
  
• T2 - BigMint received twenty-three (23) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Eighteen (18) were taken into consideration and given a 100% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document, click here.
  
  

Market highlights

• Domestic pellet prices inch up, export offers drop: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil inched up by INR 100/t ($1/t) w-o-w to INR 7,900/t ($93/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur rose by INR 100/t ($1/t) w-o-w to INR 9,200/t ($109/t) exw on 6 December. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) decreased by $3/t w-o-w to $101.5/t on 6 December. Around four cargos (over 200,000 t) of pellet export deals were concluded at $113-115/t CFR China at the beginning of the week but are yet to be confirmed.
  
  
• Fines export prices rise w-o-w: BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $2/tonne (t) w-o-w to $66/t FOB east coast, India, on 5 December 2024. The rise in buying interest ahead of the Chinese holidays fuelled a series of active deals, narrowing the price disparities between buyers and sellers. Over 400,000 t of iron ore fines (Fe54-57%) export deals were concluded from the east coast this week.
  
  
• Sponge iron prices up w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela rose by INR 450/t ($5/t) w-o-w to INR 26,350/t ($311/t) on 6 December. Similarly, steel billet (100*100 mm) offers in Rourkela increased INR 750t ($9/t) w-o-w to INR 37,950/t ($460/t) today.
  
  

Outlook

According to BigMint analysis, iron ore prices may remain volatile in the coming days. As per sources, trading activity is expected to surge in the near term because of fresh offers from miners.