India: Iron ore concentrate prices rise by INR 100/t amid supply concerns

Iron ore concentrate prices in Jabalpur, central India, increased this week. Supply concerns amid the ongoing rainy season, hike in pellet offers and Odisha iron ore prices have supported iron ore concentrate prices, SteelMint notes.

SteelMint's assesses Fe 63% concentrate at around INR 4,650/tonne (t) exw, up INR 100/t as against the last assessment on 9 September.

"Besides hike in pellet offers and Odisha iron ore prices, continuous rain in the Jabalpur region has pushed prices higher as mining has become quite impossible which has led to a shortage of raw materials. Previously, mined raw materials were consumed for old orders. Meanwhile, the market is waiting for NMDC's iron ore price revision", a Jabalpur-based seller source said.

Rationale:

• One trade was recorded and was taken into consideration for index calculation and given 50% weightage.
  
  
• Ten (10) offers and indicative prices were reported, with seven (7) of them being considered as T2 trades and receiving 50% weightage.
  
  

Why prices are rising?

• Hike in pellet offers: Godawari Power and Ispat Ltd (GPIL) has raised pellet (Fe 63.5% and Fe 66%) offers by INR 200/t to INR 10,500/t ($129/t) and 12,500/t ($153/t) exw-Raipur, respectively. Other pellet producers are offering at INR 10,200-10,500/t exw. They have also increased offers by INR 200/t.
  
  
• Odisha iron ore prices rise w-o-w: SteelMint's weekly Odisha iron ore fines (Fe 62%) index increased by INR 100/t w-o-w to INR 4,600/t ex-mines on 9 September compared to the last assessment on 2 September, thereby rising for the second consecutive week. Owing to limited offers from merchant miners amidst pending dispatches, a few of them were heard to have held back offers this week.
  
  

Outlook

Iron ore concentrate prices are expected to remain supported on the back of rising pellet and Odisha iron ore prices. Meanwhile, market participants are looking forward to NMDC's iron ore price revision for September dispatches to get better price clarity.