India: Iron ore concentrate prices stay firm in recent deals post-OMC auction

• Volatile pellet, iron ore markets pressure conc prices
  
  
• Bids fall, miners yet to revise offers post-OMC auction
  
  

Iron ore concentrate prices in Jabalpur, India, remained unchanged this week, with BigMint's bi-weekly index for the same assessed at INR 4,600/tonne (t) ($53/t) exw, stable from the previous assessment on 18 January 2025.

Prices were under pressure due to (1) subdued sentiments in the pellet and Odisha iron ore markets following the latest iron ore auction from the Odisha Mining Corporation (OMC) and (2) a fall in bids for future trades.

A buyer told BigMint, "Our bid remains firm at INR 4,300-4,400/t ($50-51/t) exw-Jabalpur. While some are offering within this range, it is for Fe 62/62.5% grade. We require Fe 63% grade at this price, so we have made no purchases yet."

"Inquiries have decreased, and the iron ore market remains uncertain following the OMC auction, as miners are yet to revise their offers," said a Jabalpur-based seller.

Rationale

• Three (3) trades of 16,000 t were recorded in the publishing window. These were accorded 50% weightage.
  
  
• Eight (8) offers and indicative prices were reported, out of which seven (7) were taken into consideration as T2 trades, receiving the balance 50% weightage.
  
  

Why are concentrate prices under pressure?

• Bids drop in OMC's fines auction: In OMC's auction for around 1.589 million tonnes (mnt) of iron ore fines (Fe 55-65%) on 17 January 2025, around 1.493 mnt (94%) were booked at INR 2,550-5,000/t ($29-58/t) ex-mines. A few lots fetched bids at a premium of INR 150-850/t ($2-10/t) against the base price. However, the weighted average of bids fell by around INR 250/t ($3/t) m-o-m.
  
  
• Pellet prices remain stable on muted deals: Raipur's pellet prices were stable over the last couple of days, though trades remained subdued due to weak market sentiments. Sponge iron and billet prices declined w-o-w, largely driven by liquidity concerns and limited inquiries from end-users, which forced pellet buyers to exercise caution regarding fresh trades. BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,400/t ($109/t) DAP Raipur on 21 January 2025 compared to the previous assessment on 17 January.
  
  
• Odisha iron ore prices fall INR 200/t ($2/t) w-o-w: BigMint's Odisha iron ore fines (Fe 62%) index fell by INR 200/t ($3/t) w-o-w to INR 5,000/t ($58/t) ex-mines on 18 January 2025. According to BigMint's analysis, the iron ore market remains volatile, with buyers' preferences shifting and price revisions possible, indicating that tags may face further adjustments in the near term.
  
  

Outlook

Market participants are closely monitoring the steel, iron ore, and pellet markets, hoping for price stabilisation or an uptick that could improve overall sentiments. Until then, the market is expected to exhibit volatility, with limited transactions taking place.