India: Odisha iron ore fines index remains stable w-o-w

• Miners' offers remain unchanged
  
  
• Pellet and sponge iron prices rise w-o-w
  
  

Odisha's iron ore market witnessed stable prices this week, with moderate trade activity observed. Market participants mostly engaged in need-based purchases, awaiting clarity from the Union Budget before committing to bulk deals.

BigMint's Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 4,900/t ($57/t) ex-mines on 1 February 2025. Around 30,000 t iron ore fines (Fe60-62%) deals were concluded at INR 4,450-5,200/t ($51-60/t) ex-mines this week. Overall, around 315,000 t of iron ore (fines and lumps) deals were recorded from Odisha this week.

A trader from Barbil commented: "Most buyers are waiting for the Budget announcement before making large purchases. Any policy changes could impact pricing and demand."

Export demand has slowed due to the ongoing Chinese Lunar holidays, leading to increased domestic supply. However, material availability concerns continue, especially for high-grade ore, as some miners approach the expiry of their EC for this financial year.

Meanwhile, rising pellet and steel prices have provided slight support to iron ore prices, with deals concluding at current offers. Miners are expected to reassess pricing next week based on the Budget's outcome.

A miner informed, "We will review our pricing strategy post-Budget depending on the market response and policy directions."

Factors affecting iron ore market:

Pellet offers rise w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil rose by INR 400/t ($5/t) w-o-w at INR 8,300/t ($96/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur also increased INR 150/t ($2/t) w-o-w to INR 9,400/t ($108/t) exw on 31 January. Market sources highlighted the preference of sponge iron players for lumps over pellets.

Sponge iron prices stable w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela surged by INR 500/t ($6/t) w-o-w to INR 26,100/t ($301/t) on 31 January. Similarly, steel billet (100*100 mm) offers in Rourkela improved by INR 600/t ($7/t) w-o-w to INR 38,500/t ($444/t) yesterday.

Rationale

• T1 - Four (4) deals of Fe62% fines were recorded in the publishing window, and Two (2)were 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. Twenty (20) were taken into consideration and given a 50% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document, click here.
  
  

Raw material export market:

India pellet (Fe 63%, 3% Al) export index (FOB east coast rose by $2/t w-o-w to $105/t on 31 January. India-based pelletmaker concluded some active export deals this week ahead of the Lunar holidays. Seaborne market activity has slowed now due to the Chinese Lunar holidays.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index remained largely stable w-o-w at $67.5/t FOB east coast, India, on 30 January 2025. Three deals of around 175,000 t Fe57% fines were recorded at $64-67/t FOB east coast in this publishing window. Another deal of 80,000 t iron ore fines was recorded from the western coast at a 20-25% discount recently through an export tender.

Outlook

According to BigMint analysis, market participants remain cautiously optimistic, hoping for positive macroeconomic cues that could boost sentiment in the coming days. The full impact of the Budget on the iron ore sector will become clearer next week.