India: Iron ore concentrate prices fall in recent deals; market awaits OMC auction results

• Bids drop in recent negotiations
  
  
• OMC raises base prices of fines in auction
  
  

Iron ore concentrate prices in Jabalpur witnessed a marginal decrease this week in recently concluded deals. Weak sentiments in the pellet, sponge iron and semi-finished steel markets emerged as a matter of concern. BigMint's weekly iron ore concentrate index was assessed at around INR 4,600/tonne (t) ($53/t) exw-Jabalpur, down INR 50/t ($1/t) from the previous assessment on 11 January, 2025.

Buyers are hoping for price reductions, as they want to secure material at lower rates. The market is awaiting the results of the Odisha Mining Corporation Limited's (OMC's) auctions for further clarity. Adding to the uncertainty, NMDC has announced a price reduction of INR 350/t ($4/t) for January deliveries. NMDC has fixed prices of iron ore fines (-10 mm, Fe 64%) at INR 5,060/t ($59/t) on FOR basis from its Bacheli complex. Prices include royalty, DMF and NMET charges.

"Offers have dropped further by INR 100/t ($1/t) also due to the lack of good-quality ore from the mines", mentioned a Jabalpur-based seller.

OMC has announced an auction for 2.667 million tonnes (mnt) of iron ore, comprising 1.078 mnt of lumps and 1.589 mnt of fines, scheduled for 17 January 2025. Contrary to market expectations, the miner has raised the base prices for fines and lumps by INR 100/t ($1/t) and INR 150/t ($2/t) m-o-m, respectively. This price hike comes in response to limited iron ore availability in eastern India. Additionally, the offered quantity has been increased by 0.4 mnt compared to the previous month.

"The market is awaiting OMC's auction, which will provide clarity on whether the current price levels are sustainable or not," another major seller from the region told BigMint.

On the other hand, a major buyer said, "The sellers have now reduced the price to this level. However, our bid currently stands at INR 4,300-4,400/t ($50-51/t) exw, after which we will proceed to lift the material."

Rationale

• Three (3) trades were recorded in the publishing window and all were taken into consideration, receiving 50% weightage.
  
  
• Eight (8) offers and indicative prices were reported, out of which seven (7) were taken into consideration as T2 trades, which received the balance 50% weightage.
  
  

Meanwhile pellet prices in Raipur remained largely stable this week, with moderate trading activity observed in the market. Sellers maintained their offers even after NMDC's recent revision of iron ore prices, but buying interest remained subdued. BigMint's bi-weekly domestic pellet (Fe 63%) index inched down by INR 50/t ($1/t) to INR 9,400/t ($109/t) DAP Raipur on 14 January compared to the previous assessment on 10 January.

Outlook

Market participants are closely monitoring the steel, iron ore and pellet markets, hoping for price stabilisation or an uptick that could improve the overall market sentiments. Until then, the market is expected to exhibit volatility, with limited transactions taking place. However, the market outlook is expected to become clearer following OMC's iron ore auction, as per a few sources.