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

• Buyers' bids drop in recent negotiations
  
  
• Will prices decline post-OMC auctions?
  
  

Iron ore concentrate prices in Jabalpur remained unchanged this week. However, weak sentiments in the pellet and Odisha iron ore markets emerged as a matter of concern. BigMint's weekly iron ore concentrate index was assessed at around INR 4,950/t ($58/t) exw-Jabalpur, unchanged from the previous assessment on 14 December, 2024.

Buyers are hoping for price reductions, as they want to 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. Further uncertainty looms with NMDC yet to announce its iron ore prices for December deliveries.

"Prices will go down post-OMC's iron ore auction to around INR 4,500/t ($53/t) exw. Sellers are intentionally quoting higher offers," observed a trader to BigMint.

OMC has scheduled an auction for around 2.261 million tonnes (mnt) of iron ore, (0.861 mnt lumps and 1.4 mnt fines) today, ie, 18 December, 2024. The miner reduced fines and lump base prices by up to INR 400/t ($5/t) and INR 300/t ($4/t) m-o-m, respectively. Pellet prices decreased in the Odisha-Bengal region by around INR 700/t ($8/t), while DRI prices fell by INR 300-800/t ($4-8/t) m-o-m leading to drop in OMC's base prices.

On the other hand, a Jabalpur-based seller said, "Deals are taking place but only on need basis. there are no bulk orders."

"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.

Rationale

• Two (2) trades were recorded in the publishing window, out of which only one (1) was taken into consideration, receiving 50% weightage.
  
  
• Seven (7) offers and indicative prices were reported, out of which six (6) were taken into consideration as T2 trades, which received the balance 50% weightage.
  
  

Meanwhile, pellet prices in the Raipur region remained largely steady as market participants adopted a cautious stance ahead of the OMC iron ore auction. Trading volumes have been muted as buyers await price clarity post-auction. BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,050/t ($107/t) DAP Raipur on 17 December compared to the previous assessment on 13 December. Raipur-based pellet makers kept offers stable for Fe 63% (+/-0.5%) pellets at INR 8,900-9,000/t ($105-106/t) exw. Godawari Power & Ispat opened pellet offers for Fe 63.5% and Fe 65% at INR 9,100/t ($107/t), and INR 10,300/t ($121/t) exw, respectively.

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.