India: Iron ore concentrates prices fall to 3-month low in recent deal

• Bids fall m-o-m in OMC iron ore auction
  
  
• Buyers look for further drop in concentrates prices
  
  

Iron ore concentrates prices in Jabalpur, central India, witnessed a significant decrease this week amid prevailing weak market sentiments in pellet and Odisha iron ore market along with fall in bids on monthly basis in Odisha Mining Corporation's (OMC's) recent iron ore auction, BigMint observed.

BigMint's bi-weekly index for Fe 63% concentrate currently stands at INR 5,250/t exw ($63/t), a fall of INR 250/t ($3/t) exw as against the last assessment on 16 March, 2024. Notably, prices fell to over three-month lows in a recent deal as these price levels were seen in end-Dec'23, data maintained with BigMint shows.

"We will revise offers in a day or two and mostly it will drop seeing the current market scenario", commented a Jabalpur-based seller.

"We are expecting further drop in prices in the deals which are under negotiation", quoted a buyer from eastern India.

Moreover, the market is eagerly waiting for NMDC's price revision for March deliveries for clarity on prices. "We have not done any deal recently as we are waiting for NMDC's iron ore price revision with an expectation of a price cut or roll over," said a Maharashtra-based buyer.

Rationale:

• Two (2) trades were recorded in this publishing window but only one was considered under T1 trade and was accorded with 50% weightage.
  
  
• Nine (9) offers and indicative prices were reported, out of which, six (6) were taken into consideration as T2 trades, receiving 50% weightage.
  
  

Reasons impacting prices:

• Bids fall m-o-m in OMC's iron ore auction: OMC had an auction for 1.692 million tonnes (mnt) of iron ore fines (Fe 55-64%) on 19 March, 2024. Around 1.461 mnt of fines (86%) were booked at INR 3,100-5,000/t ($37-60/t). However, bids for fines have fell by INR 400-950/t ($5-11/t) for majority lots against last month's bids while few lots' bids dropped sharply over INR 1,050-1,150/t ($13-14/t). "After OMC, prices will go down. Also, weak market sentiments prevailing in Odisha market might weigh down prices further", told a Kandla-based trader.
  
  
• Limited pellet trades amid weak demand: BigMint's bi-weekly domestic pellet (Fe 63%) index remained stable at INR 9,200/t DAP ($110/t) Raipur on 19 March, 2024 compared to the last assessment on 16 March. The pellet market in Raipur remained stable this week. Few purchases were concluded by buyers on a need basis, and others remained cautious as the financial year is about to come to an end.
  
  

Outlook

Iron ore concentrate offers are expected to remain under pressure considering bearish market sentiments prevailing in the pellet and Odisha iron ore markets. Meanwhile, bids by buyers have dropped amid price cut expectations, which is expected to weigh down concentrate prices further.