India: NMDC announces second iron ore price hike in Oct'24

• Bids rise in OMC's iron ore auction
  
  
• Global iron ore prices rally following Chinese stimulus and pre-holiday restocking
  
  

India's largest merchant iron ore mining company, NMDC, increased list prices of iron ore CLO (calibrated lump ore) and fines today by INR 700/t($8) and INR 400/t ($5) respectively, BigMint learnt from sources. The company's prices are effective from 23 October 2024.

The miner has fixed prices of DR CLO (10-40mm, Fe67%) at INR 7,420/t ($88/t) and of iron ore fines (-10mm, Fe64%) at INR 5,410/t ($64/t) on FOR basis from its Bacheli complex. Prices include royalty, DMF and NMET charges. Notably, this is the second hike announced by the miner in Oct'24, as prior to this the miner had lifted offers up to INR 400/t on 01 Oct'24.

Factors behind price hike:

Bids jump up by over INR 1,000/t ($12/t) in OMC's iron ore fines auction - India's 2nd-largest merchant miner, Odisha Mining Corporation (OMC), conducted an auction for 1.98 mnt ore on 18 October. Out of 1.06 mnt of iron ore fines (Fe 54-65%) offered on 18 October, the entire quantity was booked at INR 3,150-5,800/t. Bids (weighted average) increased around INR 1,250/t against last month.

Slowdown in Odisha iron ore dispatches: The disruption in iron ore dispatches from Odisha due to an extended monsoon can indeed have a significant impact on the market, influencing the high bids in OMC's auctions. Dispatches from Odisha have come down to 12 mnt in September, lowest since August, as per provisional data available with BigMint. However, in H1 FY'25 dispatches have risen by 13% y-o-y.

PELLEX rises by INR 500/t ($6/t) post-increased premiums in OMC auction - BigMint's bi-weekly domestic pellet (Fe63%) index increased by INR 500/t ($6/t) to INR 10,500/t ($125/t) DAP Raipur on 22 October compared to the previous assessment on 18 October. Pellet prices in central and eastern India surged following the recent OMC auction, where m-o-m premiums exceeded INR 1,000/tonne ($12/t) -- significantly increasing manufacturing costs of the same.

Global iron ore prices rise m-o-m: Iron ore fines (Fe 62%) spot prices significantly increased by $12/t m-o-m to $105/t CFR China taken till 22 October, on monthly average basis. The price increased in the seaborne market due to a surge in restocking activity during the Golden Week holidays. However, prices remained under pressure after the holidays as Chinese stimulus has yet not impacted the market fundamentals.