India: Iron ore concentrate prices drop to over six-month lows amid weak sentiments

Iron ore concentrate prices in Jabalpur, central India, witnessed a further decrease this week due to the drop in Odisha iron ore prices, low buying interest and monsoon rains in the region. Meanwhile, market participants are eagerly waiting for NMDC's price revision for July 2023 to get better clarity.

"The market is currently performing very poorly due to low buying interest. Our inventories have gone up due to less trading," said a Jabalpur-based seller.

SteelMint's index for Fe 63% concentrate currently stands at INR 3,900/tonne (t) exw, down by INR 100/t exw as against the last assessment on 8 July. The index has fallen to over six months' low, as these levels were last seen in end-December, 2022, as per SteelMint's records.

Rationale:

• One (1) deal of around 20,000 t was heard concluded but was not taken into consideration as T1 trade for index calculation and given 0% weightage.
  
  
• Six (6) offers and indicative prices were reported out of which five (5) were taken into consideration as T2 trade and accorded the 100% weightage.
  
  

Factors weighing on iron ore concentrate prices:

• Odisha iron ore prices fall w-o-w: SteelMint's weekly Odisha iron ore fines (Fe 62%) index decreased by INR 150/t to INR 4,800/t ex-mines on 8 July, 2023 compared to the last assessment on 1 July. As per sources, the bids are still on the lower side, given the lower pellet prices. Sources informed SteelMint that iron ore dispatches from Odisha have also decreased in the last month. The recent auctions conducted this week have received a subdued response. Many of the pellet makers are seen blending Odisha ore with that from other regions like Chandrapur etc.
  
  
• Pellet prices unchanged w-o-w: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable w-o-w at INR 9,000/t DAP Raipur on 11 July, 2023 as compared to the last assessment on 7 July. It has been heard that one of the major pellet makers is undertaking maintenance shutdown of its plant for 12-13 days.
  
  

Outlook

Iron ore concentrate prices might remain under pressure owing to the fall in buyers' bid prices. However, NMDC's upcoming iron ore price revision for July dispatches will emerge as the deciding factor.