India: Odisha iron ore fines index stable but may rise post OMC auction

• Iron ore fines, lumps prices remain stable
  
  
• Buyers waiting for OMC auction
  
  

BigMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,000/t ($60/t) ex-mines on 18 May, 2024. No deals of Fe 62% grade fines from merchant miners were recorded this week.

Trading activities of iron ore remained muted in Odisha as no major transactions were recorded this week. The steelmakers are waiting for upcoming OMC auctions likely to scheduled in the next week for better price clarity.

A source informed BigMint: "Iron ore prices in Odisha remained largely stable this week with lack of buying interest. State PSU miner OMC's auction may get delayed this time owing to Lok Sabha elections in Odisha on 20 May".

Some participants are expecting that bids may rise in the OMC auction as steelmakers are going to book pre monsoon restocking. While other market players stated that bids may remain southward compared to the last month.

Currently miners are holding their offers to understand the market scenario post-OMC's auction. The fluctuations in the sponge and finished steel prices kept the buyers cautious to take any buying decision.

The miner has lifted base price for upcoming fines auction by around INR 500/t.

Rationale:

• T1- One deal was recorded in this publishing window but not taken for price computation. These were given 0% weightage for index calculation.
  
  
• T2- BigMint received twenty- five (25) offers and indicative prices under T2 trade deals in this publishing window. Twenty-one (21) were taken into consideration and given 100% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document Click here
  
  

Factors affecting prices-

• Pellet offers stable d-o-d: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil remained stable w-o-w. The current assessment stands at INR 8,700/t ($104/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained increased w-o-w to INR 9,700/t ($116/t) exw on 17 May. Meanwhile, BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) decreased by $1/tonne (t) w-o-w to $103.5/t on 15 May.
  
  
• Fines export offers fall: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index fell by $1/t w-o-w to $65/tonne (t) FOB east coast on 16 May 2024. The Indian sea market remained muted this week following no active deal was recorded this week so far. Indian market participants were reluctant to book material at the current offers as they were expecting the market to improve in the coming days.
  
  
• Sponge iron prices stable w-o-w in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela remained stable w-o-w at INR 30,400/t ($364/t) on 18 May. Meanwhile, steel billet (100*100 mm) prices in Rourkela also remained largely stable w-o-w at INR 43,400/t ($519/t) today.
  
  

Outlook

Iron ore offers in Odisha will attain clarity post OMC's auction next week. However, monsoon restocking is expected to remain as the main concern for the upcoming auction.