India: Iron ore concentrate price edge down, likely to increase on higher pellet offers

Iron ore concentrate prices in Jabalpur, central India, saw a downward trend this week due to deals being concluded at previous offers.

Although offers are still prevailing in the market at INR 4,000/tonne (t) exw, some volumes were heard secured at INR 3,700/t exw, sources informed SteelMint. However, prices are likely to rise in the near term amid further hikes in pellet and iron ore prices.

SteelMint's assessment for Fe 63% concentrate prices currently stands at INR 3,800/t exw, down by INR 200/t as against the last assessment on 24 December. Meanwhile, a deal of 20,000 t was heard at INR 3,700/t exw this week which was taken into consideration in the T1 trade of the index as against no active deals reported on 24 December.

Reasons that can raise concentrate prices in the near term

• Hike in pellet prices: Raipur-based pellets producers have increased their offers by up to INR 9,400-9,500/t ($113-115/t) exw from the previous INR 9,000-9,200/t ($109-111/t) exw. Meanwhile, Godawari Power & Ispat Limited (GPIL) has increased domestic pellets (Fe63.5%, +/-0.5) offers by INR 300/t ($4/t) to INR 9,800/t exw ($118/t) from INR 9,500/t exw ($115/t) on 17 December.
  
  
• Odisha iron ore prices remain supported: SteelMint's weekly Odisha iron ore fines (Fe 62%) index has remained unchanged at INR 4,500/t ex-mines (including royalty, DMF, and NMET). Market participants reported limited trade activities this week for high-grade ore after active response seen in OMC and ESL auctions last week. However, deals for low-grade fines continued to remain in place on active export demand.
  
  

Outlook

Iron ore concentrate prices are less likely to fall in the near term owing to supportive iron ore market sentiments, SteelMint understands. Meanwhile, the market is awaiting NMDC's price revision which is expected shortly.