India: Iron ore concentrate prices stable amid weak market sentiments

Iron ore concentrate prices in Jabalpur, central India, remained stable this week amid a decline in pellet and Odisha iron ore prices.

SteelMint's index for Fe 63% concentrate stands at around INR 3,800/tonne (t) exw, stable as against the last assessment on 22 July. Meanwhile, buyers are expecting a further drop in offers owing to the current market situation as some bids were heard at around INR 3,400/t exw.

Rationale:

• One (1) deal of 8,000 t was heard concluded at INR 3,800/t exw and was taken into consideration as T1 trade for index calculation and given 50% weightage.
  
  
• Six (6) offers and indicative prices were reported out of which four (4) were taken into consideration as T2 trade and accorded 50% weightage.
  
  

Factors affecting iron ore concentrate prices:

• Fall in pellet prices amid cut in offers: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, inched down by INR 150/t w-o-w to INR 8,800/t DAP Raipur on 25 July, 2023 compared to the last assessment on 21 July. Pellet makers reduced offers as buyers are in a wait-and-watch mode as they have already restocked inventory for the monsoon season. However, they may book pellets in the coming days.
  
  
• Drop in Odisha iron ore prices post OMC auction: SteelMint's weekly Odisha iron ore fines (Fe 62%) index decreased by INR 500/t to INR 4,200/t ex-mines on 22 July, 2023 compared to the last assessment on 15 July. Buyers actively participated in Odisha Mining Corporation's (OMC) latest auction on 20 July due to lower inventories and reduction in base prices. The miner had reduced the base price for fines by up to INR 750/t and that of lumps by INR 1,400-1,800/t compared to the previous auction, which impacted iron ore offers in Odisha.
  
  

Outlook

With bearish sentiments prevailing in the iron ore market and expectations of a fall in bids, iron ore concentrate prices may come under increasing pressure.