India: BigMint's Odisha iron ore fines index falls by INR 200/t ($2) w-o-w
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- Limited availability of high-grade fines
- Export demand subdued
- Market participants in wait-and-watch mode
BigMint's weekly Odisha iron ore fines (Fe 62%) index decreased by INR 200/t ($2) w-o-w to INR 5,250/t ($63) ex-mines on 2 March 2024. No deals of higher grade fines from merchant miners were heard, while pellet-makers remained cautious amid declining pellet offers in eastern India.
Iron ore prices in Odisha remained under pressure following the decrease in pellet offers amid soft demand. Subdued demand in the export market weighed on domestic iron ore prices. Miners offered lower-grade material with slightly lower offers in order to liquidate stocks.
A trader said, "Pellet prices in the eastern region have not seen much improvement amid weak sentiments in the sponge iron and steel markets. We heard that due to low demand some plants have reduced pellet production. So a few miners in the state are offering ore at reduced prices."
A miner based in Odisha said, "We do not have enough high-grade fines or lumps in stock currently. However, we have sold relatively lower grade fines in both the domestic and export markets with discounts following the downtrend in market sentiments. A few buyers who want to buy Fe62+% fines for pellet making may choose to book the material in OMC auction as other sources have limited availability of material."
Rational:
- T1- No deals were taken from Odisha in this publishing window for price computation. These were given 0% weightage for index calculation.
- T2- BigMint received ten (10) offers and indicative prices under T2 trade deals in this publishing window. Nine (9) were taken into consideration and given 100% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification documentClick here.
Factors driving prices
- Pellet prices drop in Barbil: Pellet (6-20 mm, Fe 63%) prices in Odisha's Barbil decreased marginally by around INR 100/t ($2/t) w-o-w. The current assessment stands at INR 8,300/t ($100/t) loaded to wagon. Pellet (Fe 63%, 6-20 mm) prices in Durgapur dropped by INR 150/t ($2/t) w-o-w to INR 9,050/t ($109/t) exw on 1 Mar.
- Export demand weak: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $7/t w-o-w to $74/t FOB east coast on 29 February. A deal of 55,000 t iron ore fines (Fe57%) was concluded at $93/t CFR China in the early days of the week but the discount given by the seller is yet to be confirmed, and hence not considered in index computation.
- Iron ore spot prices decline w-o-w: The benchmark iron ore fines price dropped $5.7/t w-o-w to $115.4/ t CFR China on 1 March. Prices fell amid thin buying activities and weak downstream steel margins. However, enquiries in the seaborne market improved at lower prices. Some reports claimed that smaller-scale mills are buying the material with light volume amid their lower inventory. Major steelmakers were waiting for clearer market sentiments.
- Sponge iron prices down in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 200/t ($2t)w-o-w at INR 26,250/t ($317/t). Meanwhile, steel billet (100*100 mm) prices in Rourkela inched down by INR 100/t ($1/t)w-o-w to INR 38,400/t ($462/t) today.
Outlook
Iron ore prices in Odisha are likely to remain range-bound following the downtrend in pellet and sponge iron prices and lower availability due to exhaustion of EC limits by key merchant miners ahead of the financial year end.
