India: Iron ore concentrate prices rise to 2-month high in recent deal

• NMDC price hikes support concentrate offers
  
  
• Monsoon rains to put pressure on prices
  
  

Iron ore concentrate prices in Jabalpur, central India, witnessed an increase this week. NMDC's recent iron ore price hike announcement and positive sentiments in the pellet and Odisha iron ore markets have kept concentrate offers supported, BigMint learnt.

BigMint's weekly iron ore concentrate index stood at INR 5,000/t ($60/t) exw, up by INR 300/t ($4/t) as against the last assessment on 25 May. The index has risen to a two-month high as similar levels were last seen in end-March, 2024, as per data maintained with BigMint. Some offers were also heard at a higher level of INR 5,300/t ($64/t) exw, although no deals were reported.

"Considering the current market scenario, offers of around INR 5,300/t ($64/t) exw are appropriate. However, buyers are yet to accept the same," informed a Jabalpur-based seller.

Rationale:

• One (1) trade of 20,000 t was recorded in this publishing window, and was considered under T1 trade and was accorded with a 50% weightage.
  
  
• Nine (9) offers and indicative prices were reported and seven (7) were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Why have concentrate offers increased?

• NMDC hikes iron ore prices by up to INR 350/t ($4/t): NMDC increased list prices of iron ore calibrated lump ore and fines yesterday by INR 250/t ($3/t) and INR 350/t ($4/t) respectively, BigMint learnt from reliable sources. The company's prices are effective from 28 May, 2024. The miner has fixed prices of DR CLO (10-40 mm, Fe 67%) at INR 7,520/t ($90/t) and of iron ore fines (-10 mm, Fe64%) at INR 5,610/t ($67/t) on FoR basis from its Bacheli complex. Prices include royalty, DMF and NMET charges.
  
  
• Pellet index rises by INR 450/t ($5/t): BigMint's bi-weekly domestic pellet (Fe 63%) index increased by INR 450/t ($5/t) to INR 11,000/t ($132/t) DAP Raipur on 28 May, 2024 compared to the last assessment on 24 May. GPIL increased pellet offers of Fe 63.5% and Fe 66% by INR 800/t ($10/t) to INR 12,000/t ($144/t) and INR 13,500/t ($162/t) exw-Raipur, respectively. Meanwhile, other producers have raised prices by INR 800-900/t ($10-11/t) to INR 11,400-11,500/t ($137-138/t) exw.
  
  
• Odisha iron ore fines prices rise w-o-w: BigMint's weekly Odisha iron ore fines (Fe 62%) index increased by INR 400/t ($5/t) w-o-w to INR 5,400/t ($65/t) ex-mines on 25 May, 2024. However, no deals for fines from merchant miners were recorded this week except OMC's auction. Active bids in OMC's auction and sharp rise in offers from other merchant miners have supported iron ore prices in Odisha.
  
  

Outlook

Iron ore concentrate offers are expected to remain supported by positive sentiments from the Odisha iron ore and pellets markets. However, demand for concentrates typically slows down during the monsoon -- which is expected to weigh on offers.