India: Iron ore concentrate prices stable, uptick likely

• Offers stay supported post-OMC auction
  
  
• Sellers focus on completing pending deliveries
  
  
• Market awaits NMDC iron ore price revision
  
  

Iron ore concentrate prices in Jabalpur, central India, remained stable this week. Active participation in Odisha Mining Corporation's (OMC's) and National Mineral Development Corporation's (NMDC's) recent iron ore auction in Chhattisgarh (CG) along with hike in pellet and Odisha iron ore prices have kept iron ore concentrate prices supported, BigMint observed.

BigMint's bi-weekly index for Fe 63% concentrate currently stands at INR 4,200/t ($50/t) exw, stable as against the last assessment on 20 April.

Some offers were heard at higher levels of INR 4,500/t ($54/t) exw as they are completing their pending deliveries and are not in a mood to reduce offers, currently. "We are firm with our offers and not in a mood to change. Pending deliveries are still going on," mentioned a Jabalpur-based seller.

Another concentrate seller told BigMint, "There has been rake availability issue since previous week. Most of them are being allocated for coal, as a result of which, we are not able to dispatch the material. In such scenarios, orders will get delayed."

Rationale:

• Two (2) trades amounting to a total of 22,000 t were recorded in this publishing window and all were considered under T1 trade and were accorded with a 50% weightage.
  
  
• Ten (10) offers and indicative prices were reported and all were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Factors supporting concentrate offers:

• Bids surge in OMC's iron ore fines auction: OMC conducted an auction for 1.828 million tonnes (mnt) of iron ore fines (Fe 54-65%) on 19 April, 2024. Entire quantity of fines was booked at INR 2,850-5,600/t ($34-67/t). Notably, bids for fines have increased by INR 300-900/t ($4-11/t) for majority lots against last month's bids, as per BigMint's analysis. An increase in pellet prices along with hike in sponge and finished steel prices boosted steelmakers' confidence for aggressive bids.
  
  
• NMDC CG iron ore auction fetches premium: NMDC conducted an auction for 10,000 t of iron ore lumps (10-20 mm, Fe 65.5%) from its Bacheli mines in Chhattisgarh on 19 April, 2024. According to sources, the entire quantity was booked at a premium of 11% over the base price of INR 6,297/t. Prices are on FOT, ex-stockpile/mines basis and inclusive of royalty, DMF and NMET.
  
  
• Odisha iron ore fines prices rise by INR 350/t w-o-w: BigMint's weekly Odisha iron ore fines (Fe 62%) index rose by INR 350/t to INR 4,950/t ($59/t) ex-mines on 20 April 2024. Reportedly, decent quantity of Fe 62% fines trades were concluded in the auction, with premium bids received. Iron ore fines prices increased sharply in Odisha while lumps' offers also improved this week post-OMC auction.
  
  
• Stability in pellet prices: BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,850/t ($118/t) DAP Raipur on 23 April, 2024 compared to the last assessment on 19 April. This is due to active deals in the local market and increased offers in Odisha. Furthermore, the recent increase in sponge iron prices has strengthened market sentiment, reinforcing confidence among buyers.
  
  

Outlook

Iron ore concentrate offers are expected to remain supported in the near-term amid supportive sentiments from pellets and Odisha iron ore market. Meanwhile, market participants are eagerly waiting for NMDC's CG iron ore price revision which is round the corner to gain more clarity in prices.