India: Iron ore concentrate prices remain flat, market awaits OMC auction results

• Pellet, iron ore markets remain dull
  
  
• Market players lack price clarity
  
  

Iron ore concentrate prices in Jabalpur remained unchanged this week. However, the weak sentiments in the pellet and Odisha iron ore markets, have emerged as a matter of concern. Buyers are hoping for price reductions, as they seek material at lower rates. Additionally, the market is awaiting the results of the Odisha Mining Corporation Limited's (OMC's) auctions for further clarity.

OMC scheduled an auction of approximately 2 million tonnes (mnt) of iron ore, (0.87 mnt of lumps and 1.15 mnt of fines) today (20 November, 2024). The miner has reduced lump base prices by INR 950/tonne (t) ($11/t) m-o-m but kept the iron ore fines base prices unchanged. This decision was due to the drop of over INR 2,000/t ($24/t) in sponge C-DRI prices in the eastern region amid uncertain market dynamics.

BigMint's weekly iron ore concentrate index was assessed at around INR 5,050/t ($60/t) exw-Jabalpur, unchanged from the previous assessment on 16 November, 2024.

"The offers still remains supportive, as trades continue to conclude at the current offers. However, OMC auction results will provide some clarity now as the pellet and iron ore markets have been volatile recently," observed a Jabalpur-based seller.

On the contrary, a trader told BigMint that,"Prices are likely to go down further."

Rationale

• Two (2) trades of 13,000 t were recorded in the publishing window, out of which only one (1) was taken into consideration, receiving 50% weightage.
  
  
• Eight (8) offers and indicative prices were reported, out of which four (4) were taken into consideration as T2 trades, which received the balance 50% weightage.
  
  

Market highlights

• Pellet prices fall INR 250/t ($3/t) on limited trades: Pellet prices in the Raipur region have seen a significant decline w-o-w as local producers lowered their offers in response to weak market sentiments. The market is being pressured by a steep drop in sponge iron and steel prices over the past week, which has greatly affected pellet demand. BigMint's bi-weekly domestic pellet (Fe 63%) index decreased by INR 250/t ($3/t) to INR 9,600/t ($114/t) DAP Raipur on 19 November, 2024 compared to the previous assessment on 15 November.
  
  
• Odisha iron ore fines prices drop INR 100/t ($1/t): BigMint's Odisha iron ore fines (Fe 62%) index dropped by INR 100/t ($1/t) w-o-w to INR 5,350/t ($63/t) ex-mines on 16 November, 2024. Iron ore prices in Odisha remained under pressure this week as the domestic pellet, sponge iron and steel markets continued their downtrend. Market participants attribute this to a lack of confidence among steelmakers in procuring raw materials at prevailing rates. The ongoing slump in iron ore export prices further weighed on raw material prices in the eastern region, BigMint noted.
  
  

Outlook

Market participants are closely monitoring the steel, iron ore and pellet sector, 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 market sources.