India: Iron ore concentrate prices rise in recent deal, OMC's ore price hike

• OMC's recent base price hike, active deals pushed up concentrate offers
  
  
• Market awaits OMC auction results
  
  
• Falling pellet prices weigh on bids for concentrate
  
  

Iron ore concentrate prices in Jabalpur, central India, rose by INR 100/t ($1/t) w-o-w. Stability in Odisha iron ore prices and Odisha Mining Corporation's (OMC's) recent base price hike announcement have supported iron ore concentrate prices, SteelMint noted.

SteelMint's bi-weekly index for Fe 63% concentrate currently stood at INR 5,700/t ($69/t) exw, a rise of INR 100/t ($1/t), w-o-w.

"Falling pellet prices have obviously become a matter of concern for iron ore concentrate market. However, we are waiting for OMC iron ore auction results which is going to support the prices," mentioned a Jabalpur-based seller.

"Prices should come down followed by drop in pellet offers," said a Kandla-based trader.

Rationale:

• Two (2) trades of 50,000 t and 8,000 t were recorded in this publishing window and were accorded with 50% weightage.
  
  
• Ten (10) offers and indicative prices were reported, out of which nine (9) were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Why iron ore concentrate offers went up?

• OMC base price hike announcement: OMC has scheduled an auction for 2.77 million tonnes (mnt) of iron ore (1.524 mnt of fines and 1.241 mnt of lumps) on 19 January, 2024. The miner has raised the base price m-o-m by INR 350-400/t ($4-5/t) and INR 50-250/t ($1-3/t) for the fines and lumps lots, respectively.
  
  
• Stability in Odisha iron ore fines prices w-o-w: SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,500/t ($66/t) ex-mines on 13 January, 2024. The Odisha iron ore market remained muted this week as no major trading activity was witnessed. Market participants remained sidelined and cautious about booking material as the pellet and sponge iron markets saw a drop in offers.
  
  

Outlook

The iron ore concentrate market witnessed mixed sentiments this week, with buyers anticipating a reduction in offers followed by a drop in pellet price. At the same time, sellers anticipate an upward price correction due to OMC's iron ore base price hike. However, market will gain price clarity post-OMC iron ore auction.