India: Iron ore concentrate prices remain supported on active trade

Iron ore concentrate prices in Jabalpur, central India, remained supported this week on active trades at current offers. Meanwhile, stability in iron ore and pellet prices in Odisha has kept iron ore concentrate prices supported, SteelMint understands.

SteelMint's index for Fe 63% concentrates currently stands at INR 4,200/tonne (t) exw, stable as against the last assessment on 24 June. However, some bids were heard at around INR 4,000/t exw.

Rationale:

• Two (2) deals of around 40,000 t were heard concluded and all were taken into consideration as T1 trade for index calculation and given 50% weightage.
  
  
• Eight (8) offers, bids and indicative prices were reported out of which seven (7) were taken into consideration as T2 trade and accorded the balance 50% weightage.
  
  

Why prices stay supported?

• Pellet prices remain range-bound: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell slightly by INR 50/t to INR 9,050/t DAP Raipur on 27 June compared to the last assessment on 23 June. Godawari Power and Ispat Ltd (GPIL) has kept pellet (Fe 63.5% +/-0.5) offers stable at INR 9,200/t exw-Raipur. Other Raipur-based pellet players' offers were in the range of INR 8,800-8,900/t exw. Buyers are looking to buy pellets to stock up on their inventories ahead of monsoon, while others are awaiting price revision from NMDC.
  
  
• Odisha iron ore fines prices stable w-o-w: SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,200/t ex-mines on 24 June compared to the last assessment on 17 June.
  
  
• Seasonal factor: During the monsoon season, iron ore availability in India remains tight. This could be supporting iron ore concentrate prices. "We are expecting prices to remain supported in the near term amid supply concerns due to monsoons," said a Jabalpur-based seller.
  
  

Outlook

As per sources, iron ore concentrate prices are likely to remain supported in the near term. However, fall in bids from the buyers' side and NMDC's upcoming iron ore price revision for July dispatches will emerge as the deciding factors.