India: Odisha iron ore fines index inches up w-o-w

• Few miners raise iron ore offers
  
  
• Export prices sharply fall w-o-w
  
  
• High-grade iron ore availability remains tight
  
  

BigMint's Odisha iron ore fines (Fe 62%) index inched up by INR 100/t w-o-w to INR 4,200/tonne ($50/t) ex-mines as of 7 September. Over the past week, private miners in Odisha closed deals for approximately 315,000 t of iron ore. No significant transactions occurred in the higher-grade fines market due to limited material availability. Additionally, some miners refrained from offering material in the merchant market because of pending deliveries of older bookings.

The demand and supply of iron ore have balanced out as material supply has tightened due to production disruptions caused by heavy rain and logistical challenges. At the same time, demand from steelmakers has remained moderate, partly due to the recent decline in pellet prices in the central-eastern region and other steel segments. Over the last two weeks, the export market for iron ore and pellets has sharply declined, increasing pressure on the domestic market and prompting exporters to explore domestic market options.

Market sources reported that iron ore prices in the region have fallen by around INR 100-200/t for both fines and lumps, but buying interest remained tepid this week.

A miner commented, "We have raised offers of iron ore by INR 200-300/t this week and have seen good sales at the new prices. Due to heavy rain in Odisha, mine production has been affected, leading to less availability, necessitating a price adjustment. However, some buyers did not receive their material from OMC, prompting them to place orders with other merchant miners to meet their current needs."

Sources indicated that determining the actual tradable prices in Odisha is challenging, as miners have increased their offers despite no improvement in the pellet and steel markets. Additionally, export prices for iron ore and pellets have hit their lowest point due to a lack of demand from China.

Rationale:

• T1 - No deals of Fe 62% fines were recorded from merchant miners in the publishing window. As a result, this was not considered for price computation. This was given a 0% weightage for index calculation.
  
  
• T2 - BigMint received twenty-four (24) offers and indicative prices under T2 offers, indicative, and bids in this publishing window. Twenty-one (21) were taken into consideration and given a 100% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document, click here.
  
  

Market highlights:

• Pellet prices stable, exports sharply fall w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil remained unchanged w-o-w. The current assessment stands at INR 7,050/t ($84/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable at INR 7,700/t ($92/t) exw on 30 August. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB East Coast) significantly decreased by $11.5/t w-o-w to $83.5/t on 6 September with no deals.
  
  
• Fines export prices decline w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $7.5/t w-o-w to $51.5/t FOB East Coast on 5 September. Iron ore prices fell sharply in the overseas market this week following the continuous drop in the global fines spot and futures prices.
  
  
• Sponge iron prices stable w-o-w: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela remained largely stable w-o-w at INR 26,000/t ($310/t) on7 September. Meanwhile, steel billet (100*100 mm) prices in Rourkela inched down by INR 100/t ($1/t) w-o-w to INR 37,600/t ($448/t) today.
  
  

Outlook

Iron ore prices are expected to be volatile in the coming days, given the current market dynamics. Buyers are not in a rush to purchase material immediately and have adopted a wait-and-watch approach.