India: BigMint's Odisha iron ore fines index stable even as supplies tighten

• Merchant miners fast exhausting EC limits for this fiscal
  
  
• Trade activities on slow lane after active bookings at recent OMC auction
  
  

BigMint's weekly Odisha iron ore fines (Fe 62%) index inched down by INR 50/t INR 5,800/t ex-mines on 27 January, 2024.

Market activity remained muted as most buyers booked material in the OMC auction last week. However, a few buyers remained sidelined following material availability at higher offers. The sluggish approach of buyers weighed down iron ore prices in Odisha, as market participants were not interested in booking at current offers.

As per BigMint analysis, a few key merchant miners like Geetarani Mohanty, SN Mohanty, NE, PTA, and Kashvi which have combined EC limits of nearly 12 mnt pa, have exhausted their EC limits in the range of 75-90% until Dec'23.

"A few pellet makers are planning to schedule maintenance shutdowns or production cuts in the region as production costs increased amid higher iron ore fines prices. The current market scenario is unpredictable as a few miners are floating offers, while some of them are already sold for the next month," a trader said.

Rationale:

• T1- No deals from odisha were considered in this publishing window under price computation. It was given 0% weightage for index calculation.
  
  
• T2- SteelMint received sixteen (16) offers and indicative prices under T2 trade deals in this publishing window. eleven (11) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Factors driving prices:

• Barbil pellet prices largely stable w-o-w: Pellet (6-20 mm, Fe 63%) prices in Odisha's Barbil increased marginally by around INR 100/t w-o-w. The current assessment stands at INR 9,200/t loaded to wagon. However, pellet (Fe 63%, 6-20 mm) prices in Durgapur largely remained stable w-o-w at INR 9,700/t exw on 25 January.
  
  
• Rise in fines export prices: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $8/tonne (t) w-o-w to $91/t FOB east coast on 25 January 2024. Totel deals of 190,000 t were recorded of Fe 54-57% grade fines exported from India in the last one week. Iron ore fines export offers saw an uptick this week after improvements in the economic outlook in China for the near term.
  
  
• Rourkela sponge iron prices fall w-o-w: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela slightly decreased by INR 250/t to INR 26,450/t exw on 27 January compared to last week. However, steel billet (100*100 mm) prices in Rourkela remained stable w-o-w at INR 38,600/t today.
  
  

Outlook

Odisha iron ore prices are likely to remain volatile in the coming days following the current market dynamics owing to high offers and expected pellet production cuts.