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BigMint: Odisha iron ore fines index remains stable on rising pellet prices

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Fines/Lumps
By
BigMint Bureau
285 Reads
28 Sep 2024, 15:30 IST
BigMint: Odisha iron ore fines index remains stable on rising pellet prices

  • Iron ore fines export prices rise amid hike in global prices

  • Positive sentiments emerge from downstream steel sector

BigMint's Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 4,500/tonne ($54/t) ex-mines as of 28 September. Iron ore prices in the Odisha region remained stable this week, with trading activity seeing a slight uptick following the recent Odisha Mining Corporation's (OMC's) auction. Some miners raised their offers by INR 250-350/t, driven by the higher bids at last week's auction. However, overall trading activity remained moderate. Because major buyers have already secured sufficient material during September's OMC auction.

An Odisha-based trader said, "The market for semi-finished and finished goods is picking up, which is driving up demand for raw materials like iron ore. This is contributing to the recent price hikes in the region." The recent auction from Odisha received a strong response from buyers, with the entire quantity of iron ore on offer being booked in both Vedanta ESL's and OMDC's auctions, indicating increased demand. India's iron ore production fell to 19 million tonnes (mnt) in August 2024 due to extended monsoon impacting supplies, which, in turn, supported prices.

Additionally, the market regained momentum following a rise in the iron ore fines index, driven by favourable macroeconomic news from China. Improved economic conditions in China have boosted global demand, thereby influencing domestic prices as well.

Rationale:

  • T1 - Two (2) deals of Fe 62% fines were recorded in the publishing window. One (1) of this was considered for price computation. This was given a 50% weightage for index calculation.

  • T2 - BigMint received sixteen (16) offers and indicative prices under T2 offers, indicative, and bids in this publishing window. Fourteen (14) 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 rise w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil rose by INR 650/t ($8/t) w-o-w. The current assessment stands at INR 7,450/t ($89/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur increased sharply by INR 850/t w-o-w to INR 8,550/t ($102/t) exw on 27 September. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased significantly by $11.5/t w-o-w to $95.5/t on 27 September.

  • Fines export prices increase w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $7.5/t w-o-w to $60.5/t FOB east coast on 26 September. The discount level dropped this week, with reductions offered at 19-20% on the global fines index. The Indian iron ore fines export market regained its momentum in the last couple of days. Deals for Fe 57.5% fines concluded at $75-76/t CFR China, and Fe 54.5% fines cargoes were sold at a 22% discount on the international fines index.

  • Sponge iron prices surge w-o-w: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela increased by INR 1,500/t ($18/t) w-o-w to INR 27,900/t ($333/t) on 27 September. Meanwhile, steel billet (100*100 mm) prices in Rourkela increased by INR 1,900/t ($23/t)to INR 38,900/t ($464/t) w-o-w today.

Outlook

Iron ore prices in the Odisha region are expected to remain supported in the coming week, driven by the reinstatement of government projects, an increase in global iron ore prices, and strong export momentum. Positive sentiment in the downstream finished steel sector and the end of monsoon, which is likely to boost construction activity, are also contributing to the anticipated price increase.

28 Sep 2024, 15:30 IST

 

 

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