India: Iron ore concentrate prices stay firm but outlook subdued

• Prices under pressure after NMDC cut
  
  
• Weak sentiments prevail in Odisha post-OMC auction
  
  
• Buyers expect further drop in concentrates prices
  
  

Iron ore concentrate prices in Jabalpur, central India, remained unchanged this week. NMDC's price cut announcement last week along with declining prices in Odisha and the falling trajectory of BigMint's low-grade iron ore export index have put further pressure on concentrate prices.

BigMint's bi-weekly index for Fe 63% concentrate currently stands at INR 5,250/t exw ($63/t) exw, stable as against the last assessment on 23 March.

However, participants lack clarity on prices as a few sellers have refrained from offering in the market. "We have not opened new offers currently as we don't have clarity on prices. We are completing our previous orders," said a Jabalpur-based trader.

On the other hand, a Maharashtra-based buyer told BigMint, "We are expecting a further drop in prices in the deals under negotiations".

Rationale:

• No trade was recorded in this publishing window and was accorded with 0% weightage.
  
  
• Seven (7) offers and indicative prices were reported, out of which, six (6) were taken into consideration as T2 trades, receiving 100% weightage.
  
  

Factors impacting prices:

• NMDC cuts iron ore prices by INR 250/t: India's largest merchant iron ore mining company, NMDC, decreased list prices of iron ore fines and calibrated lump ore by INR 250/t ($3/t) from its Chhattisgarh mines, effective from 21 March. The miner had fixed prices of DR CLO (10-40 mm, Fe 67%) at INR 6,970/t ($84/t) and of iron ore fines (-10 mm, Fe 64%) at INR 5,060/t ($61/t). Prices are on FOR basis from its Bacheli complex and includes royalty, DMF and NMET charges.
  
  
• Odisha iron ore prices fall post OMC auction: BigMint's weekly Odisha iron ore fines (Fe 62%) index prices decreased by INR 350/t ($4/t) w-o-w to INR 4,750/t ($57/t) ex-mines on 23 March. Iron ore prices in Odisha witnessed a downtrend following drop in bids in OMC auction.
  
  
• Global iron ore prices fall - Iron ore (Fe 62%) fines spot prices declined by $4/t w-o-w to $104.20/t CFR China on 26 March. Seaborne iron ore prices dropped due to weak demand for raw materials from the struggling steel industry along with poor steel demand. "Iron ore concentrate prices should come down after this month. Also, after new ECs are granted, if the export market does not recover, then concentrate prices are expected to fall further," said a Kandla-based trader.
  
  

Outlook

Iron ore concentrate offers are expected to remain under pressure considering bearish market sentiments prevailing in the export and Odisha iron ore markets. Meanwhile, buyers' bids have already dropped amid price cut expectations, which are expected to weigh down concentrate prices further.