India: Odisha iron ore fines index rises by INR 100/t ($1/t) ahead of OMC auction

• Over 425,000 t of deals heard at revised offers
  
  
• OMC auction expected to be provide price signals
  
  

The iron ore market in Odisha witnessed strong trading activity this week, driven by fresh offers from miners and improved sentiments for lower-grade fines in the export market. Over 425,000 t of iron ore were reportedly traded ahead of the much-anticipated Odisha Mining Corporation (OMC) auction, likely to be scheduled next week.

BigMint's Odisha iron ore fines (Fe 62%) index inched up by INR 100/t ($1/t) to INR 5,350/t ($63/t) ex-mines on 14 December 2024. In this publishing window, steelmakers concluded around 40,000 t of higher grade fines (Fe62+%) deals at INR 5,300-5,500/t ($63-65/t) ex-mines.

A steelmaker commented: "Market participants largely purchased need-based quantities at revised offers from miners, avoiding bulk purchases in anticipation of better deals in the upcoming auction. While the current offers are attractive, we expect OMC's auction to provide opportunities for bulk buying at competitive rates."

Miners have reported decent inquiries and steady sales at relaxed prices. Demand has been good, especially for fines, as export market sentiments remained conducive. However, some buyers exercised caution due to declining sponge iron and finished steel prices, awaiting clearer pricing signals.

Market players are waiting for OMC base prices and quantity announcements for the December auction.

Rationale

• T1 - Three (3) deals of Fe62% fines were recorded in the publishing window and all were considered for price computation and were given a 50% weightage for index calculation.
  
  
• T2 - BigMint received nineteen (19) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Seventeen (17) 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, export pellet prices stable w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil inched down by INR 50/t ($1/t) w-o-w to INR 7,850/t ($93/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable w-o-w at INR 9,200/t ($109/t) exw on 13 December. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained unchanged w-o-w at $101.5/t on 13 December.
  
  
• Fines export prices rise w-o-w: BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $1/tonne (t) w-o-w to $67/t FOB east coast, India, on 12 December 2024. The Indian iron ore export market witnessed robust activity this week, supported by multiple export deals for January delivery. Overseas buyers, particularly from China, have shown strong interest in Indian fines ahead of the Chinese New Year holidays. Around 300,000 t of iron ore fines (Fe55-57%) export deals were concluded from the east coast this week.
  
  
• Sponge iron prices down w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 650/t ($8/t) w-o-w to INR 26,100/t ($307/t) on 14 December. Similarly, steel billet (100*100 mm) offers in Rourkela decreased INR 350/t ($4/t) w-o-w to INR 37,400/t ($442/t) today.
  
  

Outlook

According to BigMint analysis, the market's trading volumes are expected to maintain an upward trajectory as demand firms up. Participants waiting for price clarity or aiming to replenish inventory may actively engage in the upcoming auction.