India: Odisha iron ore fines index remains stable ahead of OMC's Jan auction

• Trade activity improves marginally w-o-w
  
  
• OMC auction likely to be scheduled next week
  
  

Iron ore prices in Odisha remained largely stable this week with need-based procurement seen from steelmakers. Some miners concluded active deals of higher grade lumps for January sales which improved market sentiments slightly but major buyers remained cautious against aggressive procuring.

BigMint's Odisha iron ore fines (Fe 62%) index remained stable at INR 5,200/t ($60/t) ex-mines on 11 January 2025. In this publishing window, steelmakers concluded around 31,000 t of higher grade fines (Fe61-62%) deals at INR 5,000-5,500/t ($58-64/t) ex-mines from private miners. Overall, around 460,000 t of iron ore (fines and lumps) deals were recorded from the Odisha market this week.

A market participant commented: "Although prices have remained stable, there is growing concern about the shortage of higher-grade fines in the market. This scarcity has led steelmakers to choose mid-grade fines as an alternative."

The downward trend in export prices and subdued demand in the sponge iron and semi-finished steel markets have exerted pressure on iron ore prices. However, supply constraints continue to counterbalance these pressures. A few miners have even revoked their offers due to the lack of sellable material inventory, further tightening the market.

With stable trading activity and ongoing material shortages, iron ore prices are expected to remain range-bound ahead of the OMC auction, providing a temporary respite for market participants.

A pellet producer informed, "We are making purchases based on our needs and are currently awaiting the OMC auction to secure bulk volumes. We will postpone major purchases until the auction, expecting more competitive offers then."

Rationale

• T1 - Three (3) deals of Fe62% fines were recorded in the publishing window, and Two (2) was considered for price computation and given a 50% weightage for index calculation.
  
  
• T2 - BigMint received twenty-one (20) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Eleven (11) 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 pellets prices stable, export offers fall: 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 10 January. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) fell by $1/t w-o-w to $94/t on 10 January.
  
  
• Fines export prices fall w-o-w: BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index stood at $60/t FOB east coast, India, on 9 January 2025. The index fell marginally by $1/t w-o-w. No iron ore export deals were recorded this week amid subdued market sentiments and cautious trading by participants.
  
  
• Sponge iron prices fall w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 400/t ($5/t) w-o-w to INR 25,700/t ($298/t) on 11 January. Similarly, steel billet (100*100 mm) offers in Rourkela decreased by INR 600/t ($7/t) w-o-w to INR 37,700/t ($437/t) today.
  
  

Outlook

According to BigMint analysis, iron ore prices are expected to remain range-bound with need-based trading ahead of the OMC auctions. Market sentiments will be clearer post-this auction.