India: Iron ore concentrate prices under pressure following OMC auction
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- Bids drop m-o-m in OMC's iron ore fines auction
- Weak downstream market affects prices
Rationale:
- One (1) trade of 10,000 t was recorded in this publishing window, and was accorded 50% weightage.
- Nine (9) offers and indicative prices were reported, whole (9) were taken into consideration as T2 trades, receiving a 50% weightage.
Why concentrate prices are under pressure?
- Bids drop in OMC's recent iron ore fines auction: In OMC's auction for 1.515 million tonnes (mnt) of iron ore fines (Fe 54-65%) on 20 August, 2024, the entire quantity was booked at INR 2,020-4,500/t. Bids (weighted average) for fines lots decreased by around INR 500/t compared to last month. The auction saw a sluggish response due to declining pellet and sponge iron prices, as well as a drop in global prices.
- Domestic pellet prices fall w-o-w: BigMint's bi-weekly domestic pellet (Fe63%) index decreased by INR 50/t to INR 8,950/t ($107/t) DAP Raipur as of 20 August 2024, down from 13 August. The Raipur pellet market has been moderate in recent days due to holidays. Some buyers secured material from neighbouring regions at competitive prices to meet immediate needs, while others adopted a cautious, wait-and-see approach to gain more price clarity.
- Odisha iron ore prices fall amid weak market sentiments: BigMint's Odisha iron ore fines (Fe 62%) index decreased by INR 150/t ($2/t) w-o-w, settling at INR 4,300/t ($51/t) ex-mines as of 17 August, 2024. Iron ore prices in the Odisha region remained under pressure this week following the pressure from falling sponge and finished steel prices.
Outlook
Iron ore concentrate prices are expected to remain under pressure due to ongoing challenges in the downstream construction sector and the recent drop in OMC's bids.
