India: Odisha iron ore fines index stable, market awaits for OMC auction

• Market waiting for OMC auction next week
  
  
• Deals yet to conclude amid lack of price clarity
  
  

BigMint's weekly Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 4,600/t ($55) ex-mines on 13 April 2024. No deal of standard grade Fe 62% fines was recorded this week.

Iron ore fines prices remained largely stable in the Odisha region while lumps offer improved this week after the miners' offers came this week for the trade. However, buying activity remained subdued as market participants waited for the OMC iron ore auction to get more price clarity in the market.

OMC schedule the April month iron ore auction most probably in the next week. Following the past few months' trends, the miners schedule the monthly auction on the 18th/19th day of every month.

A buyer said, "The majority of miners are offering various grades of material in the market. However, buyers are waiting for more price clarity before making a purchase. They are adopting a "wait and watch" stance until the OMC auction. Prices for lumps ore have slightly increased by the miners, while fines prices have remained stable in the past week.".

As per few participants they were expecting a price drop at the new offers, few buyers took a wait-and-watch stance as the export market is currently downtrend while the domestic market was surprisingly northward this week. However, in the last few days global prices gain momentum but the market participants are more concern of this trend to continue next week. If the global prices hike further from here may impact the prices in domestic too.

According to market participants, the export market for iron ore experienced some pressure this week, along with a decline in domestic sponge and steel prices after a sharp increased in the previous week. Notably, sponge and billet prices in the Odisha region remained largely decent this week too.

Rational:

• T1- No deal was recorded in this publishing window and not taken for price computation. These were given 0% weightage for index calculation.
  
  
• T2- BigMint received twenty-five (24) offers and indicative prices under T2 trade deals in this publishing window. Seventeen (17) 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 rise in domestic: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil rose by around INR 50/t ($1/t) w-o-w. The current assessment stands at INR 7,900/t ($95/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur also increased by INR 300/t ($4/t) w-o-w to INR 8,900/t ($107/t) exw on 12 April. Meanwhile, BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased by $4/tonne (t) w-o-w to $96/t on 10 April 2024. Pellet prices increased this week during post Qingming holidays in China. However, no deals were heard in this publishing window amid weak buying interest in the overseas markets.
  
  
• Export offers inches up: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index rose by $1/t w-o-w to $56.5/t FOB east coast on 11 April 2024. One deal of 55,000 t was heard for standard Fe 57% fines at $68/t CFR China in this publishing window. Discounts have widened from 25-27% this week.
  
  
• Sponge iron prices edge up in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela rose by INR 200/t ($2.5/t)w-o-w to INR 29,400/t ($352/t) today. Meanwhile, steel billet (100*100 mm) prices in Rourkela inched up by INR 100/t ($1/t)w-o-w to INR 41,800/t ($501/t) today.
  
  

Outlook

Iron ore prices in Odisha will get price clarity in the next week after the OMC auction.