BigMint: Odisha iron ore fines index rises INR 200/t ($2.5/t) w-o-w in recent deals

• Merchant miners hike iron ore offers
  
  
• Bids may rise at upcoming OMC auction
  
  
• Around 600,000 t iron ore deals this week
  
  

Iron ore prices in Odisha are on an upward trend ahead of the upcoming Odisha Mining Corporation (OMC) auction. Miners have kept offers high, with buyers continuing to purchase material at current prices, expecting further increases in the near future. Sources indicate that miners, having overbooked, have raised their offers, adding to the market's bullish outlook.

BigMint's Odisha iron ore fines (Fe 62%) index increased by INR 200/tonne (t) ($3/t) w-o-w to INR 5,000/t ($60/t) ex-mines as of 12 October. Deals of around 12,000 t of fines (Fe62%) were concluded this week, though certain sellers limited offers in the absence of higher-grade fines. Odisha miners closed deals of around 585,000 t of iron ore (fines and lumps) this week at the revised prices.

As per sources, iron ore prices rose by INR 400-500/t in October. The recent trade activity supported the prices too. Several exporters also purchased mid-grade iron ore fines for blending purposes, further stimulating trade. Overall, trade activities in the Odisha region remain positive, with strong demand driving transactions.

A miner stated, "We have increased the offers for iron ore this week due to the high number of inquiries from buyers. Because of the shortage of material, we have stopped selling some grades. Buyers are actively purchasing materials ahead of the Diwali festival for winter operations in anticipation of a price increase in the coming days. A few miners in the region have sold sufficient material in the last few days and have withdrawn their offers until the likely OMC auction next week."

Market sources suggest that bids will likely increase at the October OMC auction, aligning with ongoing market dynamics. The earlier increase in pellet and sponge iron prices supports this rise in prices, which has reinforced higher iron ore offers. The market is expected to stay robust in the coming weeks as traders position themselves for further price hikes.

Rationale

• T1 - Two (2) deals of Fe 62% fines were recorded in the publishing window. Both were considered for price computation and were given a 50% weightage for index calculation.
  
  
• T2 - BigMint received twenty-two (22) 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 this week: Pellet prices in the domestic and seaborne markets rose sharply this week, following supportive sentiments and a surge in global fines prices. Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil remained stable w-o-w at INR 8,100/t ($96/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur rose by INR 200/t ($2.5/t)w-o-w to INR 9,350/t ($111/t) exw on 11 October. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) dropped by $2.5/t w-o-w to $101.5/t on 11 October.
  
  
• Fines export prices drop w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $3.5/t w-o-w to $63.5/t FOB east coast on 10 October. Low-grade iron ore fines experienced a price dip following the Chinese Golden week holidays, as trading activity was sluggish. Negotiations were going on for several deals, but none were finalised due to bid-offer disparity between buyers and sellers.
  
  
• Sponge iron prices stable w-o-w: BigMint's assessment of sponge iron C-DRI (FeM 80%) prices in Rourkela remained largely stable w-o-w at INR 29,500/t ($351/t) on 11 October. Meanwhile, steel billet (100*100 mm) offers in Rourkela decreased by INR 300/t ($4/t) w-o-w to INR 40,400/t ($480/t) today.
  
  

Outlook

Prices of iron ore in the Odisha region are expected to stay high due to the current demand trend. The market will have a better understanding of the prices after the OMC auction, which is scheduled to take place between 18-20 October. It is anticipated that there will be an increase in the base prices compared to last month.