India: Odisha iron ore fines index falls INR 50/t ($0.5/t ) w-o-w

• Some miners cut iron ore offers in New Year
  
  
• Trade activity falls amid weak market sentiments
  
  

Iron ore prices in Odisha remained under pressure in the first week of CY'25 following lower bids from buyers for raw material purchases. A few miners reduced their prices by INR 200-300/t to encourage trade amid muted buying interest. However, buyers appear to be holding back, anticipating further price reductions before committing to new deals.

BigMint's Odisha iron ore fines (Fe 62%) index inched down by INR 50/t ($0.5/t) to INR 5,200/t ($61/t) ex-mines on 4th January 2025. In this publishing window, steelmakers concluded around 14,000 t of higher grade fines (Fe61-62%) deals at INR 4,900-5,100/t ($57-60/t) ex-mines from private miners. Overall, around 230,000 t of iron ore (fines and lumps) deals were recorded from the Odisha market this week compared to 450,000 t in the previous week.

Market participants noted that while dispatches under previously concluded deals have improved, fresh trading volumes have remained limited due to a lack of attractive offers.

A trader commented, "The current market sentiment is weak. Buyers are cautious, hoping for better pricing with the upcoming offers."

Miners are expected to present new offers next week and updated quantity allocations for January sales. This is expected to influence trading activity in January. A miner commented: "We anticipate that revised offers will help stimulate demand, as buyers will need to replenish their raw material inventory for the month."

As buyers remain on the sidelines waiting for price reductions, the market anticipates a further decline in iron ore prices. Once new offers are made available, trading activity may increase, enhancing the market's fundamentals.

Rationale

• T1 - Two (2) deals of Fe62% fines were recorded in the publishing window, and one (1) was considered for price computation and given a 50% weightage for index calculation.
  
  
• T2 - BigMint received twenty-six (26) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Sixteen (16) 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 stable, export fall in pellet: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil remained unchanged w-o-w at INR 7,900/t ($92.5/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable w-o-w at INR 9,250/t ($108/t) exw on 3 January. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) fell by $1/t w-o-w to $95/t on 3 January.
  
  
• Fines export prices fall w-o-w: BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index inched down by $1.5/tonne (t) w-o-w to $61/t FOB east coast, India, on 2 January 2025. An Odisha-based miner concluded an export deal for around 55,000 t of iron ore fines (Fe57%) on 2 January, sources informed BigMint. The single-mine cargo was sold at an 18.5% discount on the global fines index and fetched a $76/t CFR China price.
  
  
• Sponge iron prices stable w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela remained stable w-o-w at INR 26,100/t ($305/t) on 4 January. Similarly, steel billet (100*100 mm) offers in Rourkela increased INR 500/t ($7/t) w-o-w to INR 38,300/t ($447/t) today.
  
  

Outlook

According to BigMint analysis, iron ore prices are expected to remain under pressure amid cautious buying at current offers but optimistic about improve trading activity in the coming weeks at fresh offers.