India: Odisha iron ore fines index falls INR 200/t w-o-w on lower offers

• Pressure from iron ore, pellet export markets
  
  
• Protest continues in Joda sector mines
  
  

BigMint's Odisha iron ore fines (Fe 62%) index dropped by INR 200/tonne (t) w-o-w to INR 4,500/t ($53/t) ex-mines on 13 July, 2024. Around 7,500 t of Fe 62% fines deals were recorded in this publishing window. Total 50,000 t iron ore deals were recorded by BigMint from Odisha this week.

Iron ore prices in the Odisha region remained under pressure following mixed market sentiments in between the market participants. The pellet and sponge prices showed a fluctuation and pressure from the seaborne market led to a drop in the Odisha iron ore prices.

Major buyers remained sidelined and cautious about the fresh deals this week. However, tight availability of the higher grade fines was witnessed in the region. Few steelmakers waited for the OMC iron ore July auction. However, suspended dispatches from few of its key mines have been impacting raw material demand of some sponge players.

Iron ore dispatches from several key mines of Odisha Mining Corporation Ltd. (OMC) have been temporarily suspended due to local unrest. As per sources, the affected mines include Jilling, Khadbondh, Banspani, Unchabali and Tiringpahar, which together produce approximately 7 mnt of iron ore annually, accounting for 20% of OMC's total iron ore production.

A miner said: "No major inquiry received this week amid the downtrend market sentiments and lack of buying confidence in the buyers. The protest from locals was also seen in the Joda sector mines which stopped the iron ore dispatch till the next notice. We have dropped around INR 200/t this week in the iron ore offers and waiting for the buyers' response. However, the price clarity for the buyers will be optimistic post-OMC auction."

A pellet producer commented that pressure from the global market had impacted the buying confidence in the domestic market. The buyers are waiting for the improvement of domestic pellet and sponge markets for further monsoon buying. Few buyers purchased enough material but their material dispatch is pending amid the ongoing local protest.

Rationale:

• T1- Two (2) deals of Fe 62% fines were recorded in this publishing window and considered only one for price computation. These were given 50% weightage for index calculation.
  
  
• T2- BigMint received eighteen (18) offers and indicative prices under T2 trade deals in this publishing window. Fourteen (14) were taken into consideration and given 50% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document Click here
  
  

Market highlights:

• Pellet offers drop w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil fell by INR 150/t ($2/t) w-o-w. The current assessment stands at INR 7,500/t ($94/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable w-o-w at INR 8,400/t ($107/t) exw on 12 July.
  
  
• Fines export prices fall w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $4/t w-o-w to $59/tonne (t) FOB east coast on 11 July 2024. An exporter concluded a deal for around 55,000 t of Fe 57% fines from the east coast at $72-73/t CFR China in this publishing window. Another 55,000 t of fines (Fe 57%) deal was heard concluded by a south India-based exporter at $74.5-75/t CFR China a couple of days back.
  
  
• Sponge iron prices stable w-o-w: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela remained stable w-o-w at INR 26,250/t ($309/t) on 13 July. Meanwhile, steel billet (100*100 mm) prices in Rourkela were stable w-o-w at INR 38,800/t ($467/t) today.
  
  

Outlook

Iron ore prices in Odisha will get clarity post-OMC auction.