India: Iron ore concentrate prices stay supported on active trades

Iron ore concentrate prices in Jabalpur, central India, remained stable this week. Hike in pellet offers following the hike in iron ore prices in the recent auction conducted by Odisha Mining Corporation (OMC) on 18 September, 2023 has supported concentrate prices.

SteelMint assessed Fe 63% concentrate at INR 4,700/tonne (t) exw, stable as against the last assessment on 16 September.

Rationale:

• Three (3) trades for 44,000 t were recorded and all were taken into consideration for index calculation and given 50% weightage.
  
  
• Seven (7) offers and indicative prices were reported, with six (6) of them being considered as T2 trades and receiving 50% weightage.
  
  

Factors supporting prices:

• Hike in pellet prices: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, increased by INR 350/t to INR 10,650/t DAP Raipur on 19 September compared to the last assessment on 15 September. Godawari Power and Ispat Ltd (GPIL) has increased pellet (Fe 63.5%) offers by INR 300/t to INR 10,800/t exw-Raipur, effective from 19 September. Other pellet players have also increased pellet prices by INR 200-300 to INR 10,400-10,500/t exw-Raipur.
  
  
• Odisha iron ore fines prices rise to over 2-month high: SteelMint's weekly Odisha iron ore fines (Fe 62%) index increased by INR 350/t w-o-w to INR 4,950/t ex-mines on 16 September compared to the last assessment on 9 September. The index, rising three weeks in a row, rose to over two-month high as similar levels were seen in early July 2023. Limited offers by merchant miners and hike in base prices by OMC for its September auction supported the index. As per sources, due to heavy rain in the region, miners are facing difficulty in continuing operations, followed by a hike in pellet and semi-finished steel prices m-o-m, which pushed iron ore prices higher in Odisha.
  
  
• Active response in OMC fines auction: OMC conducted an auction for 2.25 million tonnes (mnt) of iron ore fines (Fe 54-62%) on 18 September. The steelmakers participated actively in the auction, and entire quantity of fines was booked at INR 3,900-5,350/t ex-mines. Bids for fines increased by up to INR 50-850/t except for two lots against last month.
  
  
• Hike in NMDC iron ore prices: NMDC, increased list prices of iron ore on 14 September. The company raised prices of DR-CLO and fines by INR 300/t, effective from 14 September. The miner fixed prices of DR CLO (10-40mm, Fe 67%) at INR 6,270/t and those of iron ore fines (-10mm, Fe 64%) at INR 4,210/t (on FoR basis from Bacheli complex). Prices include royalty, DMF and NMET charges.
  
  

Outlook

Iron ore concentrate prices are expected to remain supported on the back of rising pellet and Odisha iron ore prices.