India: Odisha iron ore fines index falls INR 50/t ($0.5/t) amid limited trades

• Key merchant miners keep their offers on hold
  
  
• Sponge iron, billet prices fall by INR 1,000/t ($12/t) w-o-w
  
  

The iron ore market in Odisha witnessed a downward trend this week, amid sluggish market activity and limited trade. A few prominent miners refrained from offering material, further weighing on the overall trading sentiment. The lack of fresh offers led to reduced availability in the spot market, resulting in a slowdown in transactions.

BigMint's Odisha iron ore fines (Fe 62%) index dropped INR 50/t ($0.5/t) w-o-w to INR 5,250/t ($62/t) ex-mines on 30 November 2024. Private miners had no offers for iron ore amid uncertainty in the market.

Traders reported that only essential transactions occurred, as buyers remained cautious amid weak market conditions and focus on need-based deliveries. Pellet prices have dropped INR 300-500/t ($4-6/t), while sponge iron and semi-finished product prices have fallen by INR 1,000/t ($12/t), leading to reduced market liquidity with fewer trades.

A pellet producer from the eastern region informed: "Some buyers have opted to lift previously-booked material from the Odisha Mining Corporation (OMC) instead of engaging in fresh purchases. This cautious stance was attributed to recent declines in pellet and sponge iron prices, which kept buyers hesitant in committing to new deals. The price drop in downstream products has significantly impacted our purchasing decisions, as margins remain under pressure."

A steelmaker from Odisha commented: "Despite the overall weak sentiment, some deals of lower-grade material were noted, supported by an improved seaborne market. The global market's uptick has provided support to lower grade trades which were concluded by the exporters, but domestic buyers remain largely inactive."

Rationale

• T1 - One (1) deal of Fe62% fines was recorded in the publishing window and considered for price computation and was given a 50% weightage for index calculation.
  
  
• T2 - BigMint received twenty-one (21) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Fifteen (15) were taken into consideration and given a 50% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document, click here.
  
  

Market highlights

• Domestic pellet prices drop, exports up w-o-w: Pellet prices in the domestic remained under pressure while export prices were boosted due to supportive market sentiment. Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil fell by INR 300/t ($4/t) w-o-w to INR 7,800/t ($92/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur dropped by INR 500/t ($6/t) w-o-w to INR 9,100/t ($108/t) exw on 29 November. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased by $9/t w-o-w to $104.5/t on 29 Nov'24 in some active deals. An Eastern India seller concluded an export cargo deal with around 75,000 t pellet (Fe63%, max 8% Al2O3+SiO2) yesterday for December loading.
  
  
• Fines export prices rise w-o-w: BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $3/tonne (t) w-o-w to $64/t FOB east coast, India, on 28 November. The Indian iron ore export market witnessed a price surge this week, buoyed by increased interest from seaborne buyers engaging in restocking activities ahead of the Chinese New Year holidays. Around 165,000 t of fines (Fe57%) deals were recorded this week.
  
  
• Sponge iron prices decline w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 1,000/t ($12/t) w-o-w to INR 25,800/t ($305/t) on 30 November. Similarly, steel billet (100*100 mm) offers in Rourkela dropped INR 1,000/t ($12/t) w-o-w to INR 37,200/t ($440/t) today.
  
  

Outlook

According to BigMint analysis, iron ore prices will attain better clarity next week, with fresh offers from the private miners. Trades are expected to resume next week with the expectation of some optimism prevailing in terms of market sentiments and liquidity.