India: Odisha iron ore fines index softens as market activity resumes post-Diwali

• Buyers leverage lower offers, trade volumes increase
  
  
• Rising sponge, billet prices support positive sentiments
  
  

Prices of iron ore in Odisha softened following the Diwali festival due to enhanced market buying interest and inventory build-up activities. As trading resumed this week, demand for the raw material rose sharply, as buyers sought to replenish their immediate stock.

BigMint's Odisha iron ore fines (Fe 62%) index dropped by INR 150/t ($2/t) w-o-w to INR 5,450/t ($64-65/t) ex-mines on 9 November 2024. Deals of around 47,000 t of higher grade fines (Fe62%) were recorded at INR 5,400/t ($64/t) ex-mines this week in the Odisha region. Overall, deals of approximately 500,000 t iron ore (fines and lumps) were reported in the region amid improved trading activity.

Miners successfully closed notable deals with pellet producers in the central and eastern regions, leveraging slightly relaxed offers. According to one miner, "There was a favourable response from buyers, especially as steel prices have seen an uptick recently, which has bolstered market sentiment."

Market sentiments were supported by the rise in the sponge and finished steel prices, along with few active deals in the seaborne market for iron ore fines. Few miners are yet to open their November iron ore sales offers; they are expected to do the same next week.

Sources indicate that the slight rise in steel prices encouraged more trading activity in iron ore. "The recent rise in steel prices has given buyers the confidence to engage in deals, as we have witnessed active buying interest from steelmakers. Few miners relaxed offers for bulk deals, which contributed to higher trade volume in the Odisha region," a trader reported.

Rationale

• T1 - Four (4) deals of Fe 62% fines were recorded in the publishing window. All were considered for price computation and were given a 50% weightage for index calculation.
  
  
• T2 - BigMint received twenty-five (25) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Twenty-one (21) 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 pellet prices range-bound w-o-w: Pellet prices in the domestic and export markets remained range-bound. Trade improved significantly in India's central-eastern region. Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil fell by INR 150/t ($2/t) w-o-w to INR 8,450/t ($100/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable w-o-w at INR 9,700/t ($115/t) exw on 8 November. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained largely stable w-o-w at $98/t on 8 November.
  
  
• Fines export prices rise w-o-w: BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $1/t w-o-w to $65/t FOB east coast, India, on 7 November 2024. Reportedly, Odisha-based exporters sold 105,000 t of iron fines (Fe 57%) at $76-79/t CFR China this week. Additionally, another Indian trader sold a 55,000-t cargo of iron fines (Fe 56-57%) at around the same price this week.
  
  
• Sponge iron prices rise w-o-w: According to BigMint's assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela rose sharply by INR 1,000/t ($12/t) w-o-w to INR 27,800/t ($329/t) on 9 November. Meanwhile, steel billet (100*100 mm) offers in Rourkela increased by INR 950/t ($11/t) w-o-w to INR 38,750/t ($459/t) today.
  
  

Outlook

Prices are expected to remain range-bound in the short term, with some buyers adopting a wait-and-watch approach until the Odisha Mining Corporation (OMC) announces its November base prices.