India: Iron ore concentrate prices stable, may rise on supportive market sentiments

• Bids rise m-o-m in OMC's iron ore auction
  
  
• Key players raise pellet offers in Raipur
  
  
• Market expects prices to rise in the near-term
  
  

Iron ore concentrate prices in Jabalpur remained stable this week, supported by rising Odisha iron ore prices following active participation in the Odisha Mining Corporation's (OMC's) recent auction, along with an increase in pellet offers from key players. Market participants are optimistic, expecting prices to continue rising due to the favourable market sentiment.

In the same line, a seller based in Jabalpur stated: "Right now, our offers remain stable. We anticipate a hike of around INR 200/tonne (t) ($2/t) by the beginning of next month. In the meantime, we will focus on fulfilling our existing orders."

BigMint's weekly iron ore concentrate index was assessed at around INR 3,850/t ($46/t) exw-Jabalpur, unchanged from the previous assessment on 21 September, 2024.

"We have raised our offers following yesterday's pellet price increase by Raipur players. We also have a few purchase orders currently under negotiation," mentioned another Jabalpur-based seller.

Rationale

• Zero (0) trade was recorded in the publishing window, hence, accorded with 0% weightage.
  
  
• Eight (8) offers and indicative prices were reported, and all were taken into consideration as T2 trades, receiving 100% weightage.
  
  

Factors supporting concentrate prices:

• OMC fines auction fetches premium bids: In OMC's auction for 1.377 mnt of iron ore fines (Fe 54-65%) on 20 September, 2024, the entire quantity was booked at INR 2,370-4,970/t ($28-59/t). Bids (weighted average) increased around INR 275/t ($3/t) against the last month. The auction saw strong participation from steelmakers, with bids reaching a premium of INR 250-1,250/t ($3-15/t) above the set base price, driven by the limited availability of high-grade ore due to the prolonged monsoon.
  
  
• Hike in pellet prices by key players: Raipur-based pellet makers raised their offers for Fe 63%(+/-0.5%) by INR 300-400/t ($4-5/t) to INR 8,900-9,000/t ($106-108/t) exw-Raipur on Wednesday with deals of around 20,000-25,000 t concluded at the revised prices. The recent rise in Odisha's pellet prices, driven by OMC's auction and improved market sentiment in the sponge and finished steel sectors, has strengthened pellet prices in the Raipur region.
  
  
• Odisha iron ore fines index rises w-o-w: BigMint's Odisha iron ore fines (Fe 62%) index rose by INR 300/t ($4/t) w-o-w to INR 4,500/t ($54/t) ex-mines as of 21 September. The region is facing a shortage of high-grade iron ore fines due to production disruptions from the monsoon. As a result, buyers have been actively participating in the OMC auction to secure the necessary raw material inventory. According to the sources, private miners are expected to increase their offers for iron ore fines by INR 250-300/t ($3-4/t) in the coming days.
  
  

Outlook

Iron ore concentrate prices are expected to rise in the near-term, driven by anticipated offer increases from market participants. However, a clearer market outlook will likely develop after NMDC's upcoming iron ore price revision.