India: Iron ore concentrate prices fall w-o-w, market awaits OMC's auction results

Iron ore concentrate prices in Jabalpur, central India, saw a downtrend w-o-w. SteelMint's index for Fe 63% concentrate prices currently stands at around INR 5,200/tonne (t) exw, down INR up to 150/t, w-o-w. The drop in pellet prices and an inactive buying at higher offers has pulled down offers for iron ore concentrate.

Meanwhile, three deals were reported out of which only two deals of 60,000 t and 16,000 t concluded at INR 5,200/t exw, and INR 5,300/t exw were taken into consideration in the T1 trade of the index. Some offers were also heard at INR 5,500/t exw.

Market participants are eagerly waiting for the OMC's iron ore auction scheduled on 16 February to get better price clarity. Notably, the miner has increased the base price for fines by INR 450-990/t and has been rolled over for most of the lots of lumps except two by up to INR 600/t against the auction held on 17 January.

Factors weighing on iron ore concentrate prices:

• Falling pellet prices: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 9,950/t DAP Raipur on 14 February, edging down by around INR 100/t, w-o-w. Most of the steel mills holding pellets as they are expecting further price cuts in the upcoming days. Meanwhile, the market was mostly silent and participants are looking for more clarity, resulting in bid-offer disparity. Also, buyers are looking for some price revision in the iron ore to get some relief from high raw material prices on the falling sponge and billets offers.
  
  
• Low iron ore buying in Odisha at quoted offers: SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,400/t ex-mines. Apart from purchases in auctions conducted by ESL, AM/NS India, and OMC (unsold ore), hardly any other deals were reported this week. Market participants did not show much interest in the prevailing price on the fall of pellets and sponge iron offers. On the other hand, Odisha-based market players also faced rake availability issues from the past for quite some time which has led the market more concerned about the supply side in the mineral-rich state.
  
  

Outlook

Iron ore concentrate prices might fluctuate in the near-term because of deals getting concluded at lower levels against quoted offers. However, the deciding factor may be the movement of iron ore and pellet prices.