India: Iron ore concentrate prices up in recent deals, likely to rise further

• OMC auction receives active participation
  
  
• Pellet, Odisha iron ore markets sentiments support offers
  
  

Iron ore concentrate prices in Jabalpur, central India, witnessed an increase this week. Active trades, aggressive bidding in Odisha Mining Corporation's (OMC's) recent iron ore auction, and positive sentiments from the pellet and Odisha iron ore markets have kept concentrate offers supported, BigMint reported.

BigMint's weekly iron ore concentrate index stood at INR 4,700/t ($56/t) exw, up by INR 100/t ($1/t) as against the last assessment on 18 May.

"Although we have kept offers largely stable, we will increase offers in upcoming days backed by active participation in the OMC iron ore fines auction," mentioned a Jabalpur-based seller.

Rationale:

• Three (3) trades were recorded in this publishing window, and all were considered under T1 trade and were accorded with a 50% weightage.
  
  
• Ten (10) offers and indicative prices were reported and eight (8) were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Why concentrate offers have increased?

• Bids surge in OMC's iron ore fines auction: OMC conducted an auction for 1.807 mnt of iron ore fines (Fe 54-65%) on 21 May, 2024. Entire quantities of fines were booked at INR 4,220-6030/t ($51-72/t). Notably, bids of fines have increased by INR 300-1,000/t ($4-12/t) against the set base price, as per BigMint's analysis. Active buying amid restocking before upcoming monsoon along with supportive sentiments from pellet, sponge and finished steel market have called for aggressive bids by the steelmakers.
  
  
• Stability in pellet prices: BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 10,300/t ($124/t) DAP Raipur on 21 May, 2024 compared to the last assessment on 17 May. Notably, some of the pellet manufactures held back their offers. In addition, last pellet offers heard from Godawari for Fe 63.5% and Fe 66% were at INR 11,200/t ($134/t) and INR 12,700/t ($152/t) exw-Raipur respectively on 17 May. Other pellet producers have also kept their offers stable at INR 10,500-10,600/t ($126-127/t) exw.
  
  
• Odisha iron ore fines prices stable w-o-w: BigMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,000/t ($60/t) ex-mines on 18 May, 2024. However, trading activities of iron ore remained muted in Odisha as no major transactions were recorded this week.
  
  

Outlook

Iron ore concentrate offers are expected to remain supported in the near term amid supportive sentiments from Odisha iron ore market and pellets offers. However, demand for concentrates typically slows down during the monsoon season.