India: Iron ore concentrate offers rise by INR 200/t, further hikes less likely in short term

Iron ore concentrate prices in Jabalpur, central India, witnessed a sudden increase this week despite unfavourable sentiments from the pellets and Odisha iron ore market.

SteelMint's bi-weekly index for Fe 63% concentrate currently stands at INR 4,700/tonne (t) exw, an increase of INR 200/t as against the prices seen on 28 October, 2023. Meanwhile, some players are also in a mood to increase the offers by up to INR 4,900-5,200/t exw, SteelMint learnt from reliable sources.

"Active enquiries from both domestic buyers and traders buying in bulk for exports, have pushed up offers. Although pellet prices are to be watched out for in the near-term," said a Jabalpur-based seller.

"The major reason behind the hike in offers is traders buying in bulk quantity possibly for exports. This has created shortage in the domestic market," another source from Jabalpur informed.

"Exporters entering the market through traders and with rainwater still submerging the mines created shortage of raw material, leading to increase in offers," highlighted another source.

Rationale:

• Four (4) trades of around 106,000 t were recorded at INR 4,700/t exw in this publishing window which were taken into consideration and given 50% weightage.
  
  
• Six (6) offers and indicative prices were reported, with five (5) of them being considered as T2 trades and receiving 50% weightage.
  
  

Outlook

Even though iron ore concentrate offers have witnessed a hike, a few factors may weigh on prices in the near term. These include bearish market sentiments prevailing in the domestic pellets and Odisha iron ore markets. Also, some import bookings of Brazilian concentrate were reported recently by a west coast-based steel mill. Meanwhile, the market is eagerly waiting for NMDC's price revision for November 2023 deliveries - which is round the corner - for better price clarity.