India: Iron ore concentrate prices stay firm while buyers expect drop in near term

• Active deals keep prices firm
  
  
• Buyers expect drop in offers
  
  
• Market awaits NMDC price revision
  
  

Iron ore concentrate prices in Jabalpur, central India, continued to remain stable this week. Active response in the recent NMDC Chhattisgarh iron ore auction along with active deals at current offers have kept concentrate prices supported, BigMint notes.

BigMint's bi-weekly index for Fe 63% concentrate currently stands at INR 5,700/t ($69/t) exw, stable as against the last assessment on 24 February, 2024.

"Prices will remain supported till next month. However, buyers are trying to bring prices down in latest deals which are under negotiation," informed a Jabalpur-based seller.

"As we are completing previous orders, we have kept our offers unchanged," another Jabalpur-based seller said.

On the contrary, a buyer told BigMint: "We have not done any deal this week as we are waiting for NMDC's iron ore price revision with an expectation of price cut or roll over".

Rationale:

• Three (3) trades were recorded in this publishing window and were accorded with 50% weightage.
  
  
• Nine (9) offers and indicative prices were reported and all were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Why concentrate prices remain firm?

• Active response in NMDC auction: NMDC Bacheli held an auction for 88,200 t of iron ore from Chhattisgarh on 27 February. According to sources, 16,800 t of DRCLO (10-40 mm, Fe 67%) were sold at a 6% premium over the base price of INR 7,280/t ($88/t), 4,200 t of ROM (10-150 mm, Fe 65.5%) at the base price of INR INR 5,970/t ($72/t) and 67,200 t of iron ore fines (Fe 64%) were sold at the base price of INR 5,350/t ($65/t). In addition, the miner offered 33,600 t of ROM (10-150 mm, Fe 65.5%) out of which 13,400 t were sold at the base price. Prices are on FOR ex-stockpile/mines basis and includes royalty, DMF and NMET.
  
  
• Stability in pellet prices: BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,300/t ($112/t) DAP Raipur on 27 February compared to the last assessment on 23 February. The Raipur pellet market saw active bookings this week as buyers conducted bookings based on requirements.
  
  

Outlook

Even though iron ore concentrate offers remain supported, bearish market sentiments may prevail as bids from the buyers' side may witness a drop amid price cut expectations. Moreover, the market is eagerly waiting for NMDC's price revision for March deliveries - which is around the corner - for better price clarity.