India: Iron ore concentrate prices remain stable; all eyes on OMC auction

• OMC hikes iron ore base prices for Oct auction
  
  
• Trading activity continues to remain robust
  
  

This week, iron ore concentrate prices in Jabalpur, central India, held steady, influenced by an increase in the OMC base price for this month's iron ore auction. Active trading and positive sentiments from the Odisha iron ore market also contributed to this stability, sources informed BigMint.

BigMint's bi-weekly iron ore concentrate index stood at INR 4,500/tonne (t) ($54/t) exw-Jabalpur, stable from the previous assessment on 11 October, 2024. While some offers were noted at INR 4,600/t ($55/t) exw as well, no transactions were officially confirmed at that price though.

Moreover, the market is keenly awaiting the results of Odisha Mining Corporation Limited's (OMC's) iron ore auction on 18 October, 2024, which is expected to provide further clarity and direction for the market this month.

In addition to supportive sentiment from the iron ore market, another key factor driving price increase is the Railway's restrictions along this route due to ongoing maintenance work, a Jabalpur-based seller said.

Another seller from the region said, "The market is awaiting the results of the OMC iron ore auction, which will likely provide additional support for iron ore concentrate prices."

Rationale:

• Three (3) trades of 42,000 t were recorded in this publishing window, and were considered under T1 trade and were accorded with a 50% weightage.
  
  
• Seven (7) offers and indicative prices were reported and six (7) were taken into consideration as T2 trades, receiving a 50% weightage.
  
  

Factors supporting concentrate offers:

• OMC raises base prices for upcoming iron ore auction: OMC has announced an auction of approximately 1.98 million tonnes (mnt) of iron ore, (0.92 mnt of lumps and 1.06 mnt of fines) on 18 October, 2024. The base prices for both fines and lumps have been increased by INR 850-1,800/t ($10-21/t) m-o-m. This hike follows rising iron ore and pellet prices, coupled with a reduction in dispatches from Odisha, driving the miner to adjust its base prices accordingly.
  
  
• Odisha iron ore fines index rises w-o-w: BigMint's Odisha iron ore fines (Fe 62%) index increased by INR 200/t ($2/t) w-o-w to INR 5,000/t ($60/t) ex-mines as of 12 October, 2024. Iron ore prices in Odisha are on an upward trend ahead of the upcoming OMC auction. Miners have kept offers high, with buyers continuing to purchase material at current prices, expecting further increases in the near future. Sources indicate that miners, having overbooked, have raised their offers, adding to the market's bullish outlook.
  
  

Outlook

Iron ore concentrate offers are anticipated to stay supported, fuelled by positive sentiments in the iron ore market. At the same time, participants are looking forward to the OMC iron ore auction for clearer insights into market dynamics.