India: Iron ore concentrate prices fall further amid weak market sentiments

• Bids fall m-o-m in OMC's iron ore fines auction
  
  
• Domestic pellet prices fall weighing on offers
  
  

Iron ore concentrate prices in Jabalpur continued to remain under pressure for yet another week. Limited trade activities, heavy monsoon in the region, falling pellet and iron ore prices along with bid-offer disparities have weighed on prices. Meanwhile, few sellers were out of the market amid current scenario.

"We are not offering currently. No clarity on prices as no trade is taking place at current offers", mentioned a Jabalpur-based seller.

BigMint's weekly iron ore concentrate index stood at INR 4,150/t ($50/t) exw, showing a fall of INR 50/t ($1/t) as against the last assessment on 20 July. However, buyers' bids were heard at lower levels of INR 3,900-4,000/t ($47-48/t) exw. Although, deals at such lower price levels are still awaited.

Another seller from the region said, "Few previous orders have been cancelled from buyers' side as they are asking the material at much lower prices. Also, heavy monsoon have started in the region making dispatch an issue."

Rationale:

• One (1) trade for 10,000 t was recorded at INR 4,200/t exw in this publishing window, and was accorded with a 50% weightage.
  
  
• Nine (9) offers and indicative prices were reported, out of which seven (7) were taken into consideration as T2 trades, receiving a 50% weightage.
  
  

Factors that are driving prices down:

• PELLEX falls further as producers cut offers: BigMint's bi-weekly domestic pellet (Fe 63%) index fell by INR 150/t ($2/t) to INR 8,900/t ($106/t) DAP Raipur on 23 July, 2024 compared to the last assessment on 19 July. Notably, PELLEX dropped to a 1-year low. The last time such levels were recorded was in the first half of August 2023, as per data maintained with BigMint. As per sources, the significant drop in the sponge-PDRI and finished steel prices had created a selling pressure on pellet producers. The buyers' bids were continuously low against the offers which led to a drop in the Raipur pellet prices.
  
  
• Bids fall in OMC's recent iron ore fines auction - In OMC's auction for 1.485 mnt of iron ore fines (Fe 54-65%) on 20 July, 2024, entire quantity was booked. Bids decreased by around INR 150-400/t ($2-5/t) for the majority of fines lots against last month owing to a drop in pellet and sponge iron prices. However, response remained active amidst restocking ahead of monsoon.
  
  

Outlook

Iron ore concentrate offers are expected to exhibit volatility in the near term amid heavy monsoon in the region and fluctuation in pellet and Odisha iron ore prices.