BigMint Index: Odisha iron ore fines prices stable w-o-w ahead of OMC auction

• Iron ore prices stable w-o-w in Odisha
  
  
• Limited availability of material observed in state
  
  
• Market awaits OMC's iron ore auction
  
  

Iron ore prices in the Odisha region remained largely stable this week with slowed trading activity and a lack of material availability. Only a few miners have ready stock for the fresh deals while others kept the offer closed and waited for the OMC iron ore auction of September month

BigMint's Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 4,200/tonne ($50/t) ex-mines as of 14 September. A miner sold around 5000 t of iron ore fines (Fe61-62%) at INR 4100/t ex-mines this week. Over the past week, private miners in Odisha closed deals for approximately 170,000 t of iron ore across all grades of fines and lumps.

The region is experiencing limited availability of iron ore, and major market participants are holding off on purchasing as they await the upcoming OMC iron ore auction, which is schedule next week. Additionally, merchant miners have existing deals to fulfil for buyers.

A miner noted, "We are currently fulfilling previous orders. The buying demand from customers has decreased this week before the OMC auction. Other miners are also inactive due to limited stocks and obstacles in mining operations in the region. We completed a few small transactions this week and have closed sales for the next few days."

As per sources, the market sentiments remained under pressure amid the sluggish price movement of the domestic steel segments. The recent decline in the iron ore and pellet prices over the last two weeks also downed the market confidence.

An Odisha-based buyer mentioned that the current market conditions do not permit buyers to negotiate aggressively prior to the OMC auction. Key steel producers are gearing up to participate in the state miner's auction. It is anticipated that there will be adjustments to the base prices, given that prices for pellets and sponge iron have not shown any improvement since last month's auction.

Rationale:

• T1 - One (1) deal of Fe 62% fines were recorded from merchant miners in the publishing window. As a result, this was considered for price computation. This was given a 50% weightage for index calculation.
  
  
• T2 - BigMint received twenty-one (23) offers and indicative prices under T2 offers, indicative, and bids in this publishing window. Sixteen (16) were taken into consideration and given a 50% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document, click here.
  
  

Market highlights:

• Pellet prices stable w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil inched down w-o-w. The current assessment stands at INR 7,000/t ($83/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable at INR 7,700/t ($92/t) exw on 13 September. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased by $1.5/t w-o-w to $85/tonne (t) on 13 September and no pellet export deal was recorded in the last one week amid lack of buying interest.
  
  
• Fines export prices up w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index rose by $2.5/tonne (t) w-o-w to $53.5/t FOB east coast on 12 September. A trader from Odisha concluded a fines (Fe57%) export deal for a 55,000 t vessel at $64/t CFR China a few days back.
  
  
• Sponge iron prices fall w-o-w: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 300/t ($4/t) w-o-w at INR 25,700/t ($306/t) on 14 September. Meanwhile, steel billet (100*100 mm) prices in Rourkela significantly dropped by INR 1,100/t ($13/t) w-o-w at INR 36,500/t ($435/t) today.
  
  

Outlook

Iron ore prices are expected to be volatile in the coming days ahead of the OMC auction. The raw material buying activity may remain firm post-OMC auction ahead of the peak domestic season. However, its all depend on how auction auction will be concluded next week.