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

• Eastern India pellet prices continue to drop
  
  
• No trading activities witnessed
  
  

BigMint's weekly Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 5,100/t ($62) ex-mines on 16 March 2024. No deal of Fe62% fines recorded this week.

The iron ore prices in the Odisha region remained largely stable and participants were also cautious as they were waiting for OMC's March auction.

Few miners in Odisha offered the material as they still have EC of FY'24 while most of the miners had exhausted their ECs fully two weeks ago. So most of the miners are likely to open fresh offers next week post-OMC auction.

An Odisha-based miner said, "The iron ore market is performing very poorly as there was no active inquiry from buyers and the export market is also not viable at present. We received few inquiries for iron ore lumps and sold some material. However, the buyers were not interested in the iron ore fines as we offered lower grade fines. The market will be clearer after OMC's auction."

A buyer from eastern region said that "Pellet prices in Odisha have continued to drop since the last few days amid low demand and sharp drop in fines and pellets export price. This led buyers to remain cautious about material booking while few plants in Odisha have taken a maintenance shutdown. Few domestic sellers have also opted for maintenance till the OMC auction."

Rational:

• T1- No deal was taken from Odisha in this publishing window and not taken for price computation. These were given 0% weightage for index calculation.
  
  
• T2- BigMint received fifteen (15) offers and indicative prices under T2 trade deals in this publishing window. Eleven (11) were taken into consideration and given 100% weightage. To check BigMint's iron ore assessment, pricing methodology, and specification document Click here.
  
  

Factors driving prices

• Pellet offers fall in domestic, export markets: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil decreased marginally by around INR 150/t ($2/t) w-o-w. The current assessment stands at INR 7,950/t ($99/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur fell by INR 150/t w-o-w to INR 8,850/t ($109/t) exw on 15 March. BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) decreased by $7.5/tonne (t) to $97.5/t on 13 March 2024. The pellet export market dropped this week amid sluggish sentiment and lack of demand from Chinese buyers.
  
  
• Export offer witness a sharp drop: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index fell by $12/t w-o-w to $62/t FOB east coast on 14 March 2024. Iron ore fines prices in the seaborne market saw a sharp drop this week due to the poor performance of global iron ore spot and futures prices. Buyers inquired about material, but their bids remained at around $10/t lower than levels deemed viable by the sellers looking to sell.
  
  
• Sponge iron prices fall in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 450/t ($5t)w-o-w to INR 26,300/t ($317/t). Meanwhile, steel billet (100*100 mm) prices in Rourkela fell sharply by INR 500/t ($6/t)w-o-w to INR 38,500/t ($464/t) today.
  
  

Outlook

Iron ore prices in Odisha are likely to remain range-bound in the coming days. As per Bigmint analysis the market will be clear after the bids response in the OMC iron ore auction.