India: Iron ore concentrate prices stable; market awaits NMDC price revision

Iron ore concentrate prices in Jabalpur, central India, remained stable this week. Hike in pellet and Odisha iron ore prices have kept concentrate prices supported, SteelMint understands.

SteelMint's index for Fe 63% concentrate is at around INR 4,200/tonne (t) exw, remaining stable since the previous assessment on 2 September. Some of them are eyeing offers at higher levels of around INR 5,000-5,100/t exw. However, no active deals were heard concluded at increased offers.

"Although a few sellers are expecting further increase in offers, resistance is expected among buyers. In the meantime, the market is waiting for NMDC's price revision for September deliveries. Also, hike in Odisha iron ore prices might support iron ore concentrate prices in the near term", a trader source said.

Rationale:

• Five trades were recorded out of which four were taken into consideration. Four (4) 57,850 t deals were heard closed at INR 4,200/t exw and were considered as T1 trades for index calculation and given 50% weightage.
  
  
• Six (6) offers and indicative prices were reported, with five (5) of them being considered as T2 trades and receiving 50% weightage.
  
  

Factors supporting prices:

• Rise in pellet prices amid hike in offers: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 150/t to INR 10,150/t DAP Raipur on 5 September, 2023 as compared to the last assessment on 1 September. As per sources, some pellet makers are keeping sales closed in Raipur owing to pending dispatches of previous orders which has kept prices supported. They are booked till mid of next month. One of the pellet makers is under maintenance shutdown too. However, bulk pellet buyers seem to have been holding decent bookings.
  
  
• Odisha iron ore prices rise by INR 100/t w-o-w: SteelMint's weekly Odisha iron ore fines (Fe 62%) index increased INR 100/t w-o-w to INR 4,500/t ex-mines on 2 September, 2023 compared to the last assessment on 26 August. Lack of availability of high-grade ore and decent demand for fines led to the price increase in Odisha. As per sources, market participants are waiting for this month's OMC auction and are buying material on need basis. The rising prices of raw pellets have given confidence to steelmakers to raise prices while miners are also keeping their offers high.
  
  

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.