India: Odisha iron ore fines index falls INR 150/t ($2/t) w-o-w amid weak market trends

• Around 150,000 t of deals recorded this week
  
  
• OMC's June iron ore auction likely to be scheduled next week
  
  

BigMint's Odisha iron ore fines (Fe62%) index dropped by INR 150/t ($2/t) w-o-w to INR 5,300/t ($63/t) ex-mines on 15 June, 2024. No deals for Fe62% fines were recorded during this publishing window as the major miners were not offering high-grade material in the merchant market. However, around 150,000 t of deals were recorded from Odisha this week.

The iron ore market in Odisha remained volatile this week post-election as most steelmakers remained away from the market. Trading activity slowed down amid weak market fundamentals and the continuous drop in pellet and sponge iron prices in the central-eastern regions.

A miner from Odisha stated that buyers want to book material at lower prices amid a lack of clarity in the market. "We have received a few orders but the market has slowed down over the last few days. Weak sentiments in the seaborne market for iron ore and pellets weighed on domestic prices. The picture of the overall fundamentals may get clear post upcoming OMC auction which is likely to be next week.

A steelmaker from Odisha said: "The iron ore market was driven by the downtrend sentiments in the downstream. Trading activity has been lower than average as buyers hesitated to purchase material for monsoon restocking in expectation of prices dropping in the near term. A few miners did not offer in the merchant market as they happened to be waiting for the OMC auction for clarity on fresh offers."

Rationale:

• T1- No deal was recorded in this publishing window but not taken for price computation. These were given 0% weightage for index calculation.
  
  
• T2- BigMint received twenty- three (23) offers and indicative prices under T2 trade deals in this publishing window. eighteen (18) were taken into consideration and given 100% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document Click here
  
  

Market highlights:

• Pellet offers fall w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil remained stable w-o-w. The current assessment stands at INR 8,700/t ($103/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur decreased by INR 300/t ($4/t) w-o-w to INR 9,400/t ($115/t) exw on 14 June. Meanwhile, BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) dropped by $1/t w-o-w at $95/t on 12 June.
  
  
• Fines export prices stable w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $57/tonne (t) FOB east coast on 13 June 2024. No active deals were witnessed this week as most of the buyers were away from the market during the Dragon Boat Festival holidays in China. However, an Odisha-based miner sold a few cargos at $72/t CFR China a couple of days ago but the transactions have yet to be confirmed from the seller's end. However, Fe 54% fines export price still stand at 35-36% discount to $59-60/t CFR China.
  
  
• Sponge iron prices down in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela fell INR 1,500/t ($18/t) w-o-w to INR 28,100/t ($338/t) on 15 June. Meanwhile, steel billet (100*100 mm) prices in Rourkela dropped by INR 150/t ($2/t) w-o-w to INR 43,250/t ($517/t) today.
  
  

Outlook

Iron ore offers in Odisha are expected to become clearer next week following OMC's auction. Merchant trade activities may increase in the near term as buyers need to restock material before the onset of the monsoon season.