India: Iron ore concentrate prices drop in recent deal, market awaits NMDC price revision

• Sellers drop offers post-OMC auction
  
  
• Pellet, iron ore markets weigh on offers
  
  
• Buyers demand further price reductions
  
  

Iron ore concentrate prices in Jabalpur witnessed a drop this week amid amid weak pellet and iron ore market sentiments post-OMC's auction. Meanwhile, buyers expect further price cuts as they are still asking for material at comparatively lower offers, sources informed.

BigMint's weekly iron ore concentrate index stood at around INR 3,900/tonne (t) ($46/t) exw, a drop of INR 100/t ($1/t) against the last assessment on 24 August.

"Post OMC's auction, we expected the market to rise due to increase in bidding. But this did not happen," a Jabalpur-based seller told BigMint.

Another supplier from the region said, "Sellers are trying to sell at INR 4,000/t as well but buyers are seeking lower levels. The current prices are not at all feasible and it has become a matter of survial. OMC, NMDC, pellet and sponge prices are weighing on the market."

Rationale:

• Three (3) trades totalling 111,250 t were recorded in this publishing window in the price range of INR 3,850-4,000/t exw, and were accorded 50% weightage.
  
  
• Seven (7) offers and indicative prices were reported, out of which six (6) were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Why are concentrate prices under pressure?

• Raipur pellet offers drop by INR 200/t: Raipur-based pellet makers reduced their pellet offers for Fe 63% (+/_0.5%) by INR 200/t ($2/t) to INR 8,900/t ($106/t) exw-Raipur on 28 August, 2024. The recent m-o-m drop in OMC fines' bids for the August auction and competitive pellet offers from the Odisha region also led to the fall in offers.
  
  
• Odisha iron ore prices fall marginally w-o-w: BigMint's Odisha iron ore fines (Fe 62%) index decreased by INR 100/t ($1/t) w-o-w, settling at INR 4,200/t ($50/t) ex-mines as of 24 August, 2024. Iron ore fines prices in Odisha remained under pressure post-OMC's auction while the merchant miners in the state are yet to revise their offers. As per sources, major buyers secured iron ore at the auction. Market participants are now holding off on further deals, eagerly awaiting price clarity before committing to additional purchases.
  
  

Outlook

Iron ore concentrate prices are expected to remain under pressure amid weak market sentiments. Meanwhile, the market is eagerly waiting for NMDC revision to get price clarity.