India: Iron ore concentrate prices stay firm but outlook subdued

• Pending deliveries of previous orders keep offers firm
  
  
• Buyers eyeing further drop in prices
  
  
• Market waiting for NMDC, OMC price revision
  
  

Iron ore concentrate prices in Jabalpur, central India, remained unchanged this week. Sellers completing their pending deliveries have kept offers supported. However, bids from buyers have witnessed a drop of around INR 400-500/t, sources claimed. In addition, weak pellet and Odisha iron ore market sentiments have put further pressure on concentrate prices, BigMint notes.

BigMint's bi-weekly index for Fe 63% concentrate currently stands at INR 5,650/t exw ($68/t) exw, stable as against the last assessment on 9 March.

"Followed by drop in Odisha iron ore prices, recent concentrate deals under negotiation are at lower levels by INR 300-400/t than present offers", said a buyer.

On the other hand, a Jabalpur-based seller told BigMint, "It's true that buyers are asking for lower prices but it's still not accepted by sellers. However, the market is witnessing a downtrend".

Moreover, the market is eagerly waiting for NMDC's price revision for March deliveries and OMC iron ore auction - which is around the corner - for clarity on prices. "We have not done any deal this week as we are waiting for NMDC's iron ore price revision with the expectation of a price cut or roll over," said a Maharashtra-based buyer.

Rationale:

• One (1) trade of 12,000 t was recorded in this publishing window and was accorded with 50% weightage.
  
  
• Seven (7) offers and indicative prices were reported, out of which, five (5) were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Factors impacting prices:

• Bid-offer disparity weighs on pellet market: BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,150/t DAP ($110/t) Raipur on 12 March compared to the last assessment on 8 March. Godawari Power and Ispat Ltd (GPIL) has raised pellet offers by INR 200/t ($2/t) to INR 9,400-9,500/t ($114-115/t) exw-Raipur. Other major pellet makers from Raipur have also raised offers by INR 200/t ($2/t) to INR 9,100-9,200/t ($110-111/t) exw. However, sources stated that buyers have already had enough bookings and remained in wait-and-watch mode.
  
  
• Odisha iron ore prices fall w-o-w: BigMint's weekly Odisha iron ore fines (Fe 62%) index decreased by INR 150/t ($2) w-o-w to INR 5,100/t ($62) ex-mines on 9 March 2024. The iron ore offers in Odisha remained downtrend following the subdued export demand and continued drop in the pellet offers owing to surplus supply against demand. Market participants remained cautious about booking material as they were waiting for OMC's March auction.
  
  

Outlook

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