India: Odisha iron ore fines index stable; market waiting for OMC auction

• Iron ore fines, lumps prices remain stable
  
  
• Market sources expect prices to rise after OMC auction
  
  

BigMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,000/t ($60/t) ex-mines on 11 May, 2024. No deals of Fe 62% grade fines from merchant miners were recorded this week. Though deals for other grades (Fe 60% fines) were concluded for around 20,000 t at INR 4,300/t (ex-mines, including taxes).

However, buying activity remained subdued as market participants waited for the OMC iron ore auction to get more price clarity.

A source informed BigMint: " Due to the upcoming general elections in the country, the OMC auction, usually scheduled every month around the 18th or 19th, may experience a delay this month".

Iron ore prices remained largely stable in Odisha region but participants are feeling a bit cautious amid a drop in sponge and finished steel prices. Pellet prices in the region remained firm. However, things are looking a bit uncertain at the moment.

An eastern India-based pellet-maker said, "It is expected that bids will rise in OMC's auction on tighter availability of high grade ore, logistical constraints and restocking ahead of monsoons".

Some miners are holding their offers to understand the market scenario post-OMC's auction. The benchmark iron ore fines Fe-62% price remained stable w-o-w at $117/ t CFR China on 10 May as Chinese market participants returned from the Labour Day holidays.

Rationale:

• 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-three (23) 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-

• Domestic pellet offers increase: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil inched up 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 10 May. Meanwhile, BigMint's India pellet (Fe 63%, 3% Al) export index (FOB east coast) increased by $1/tonne (t) w-o-w to $106/t on 8 May.
  
  
• Fines export offers stable: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $66/t FOB east coast on 9 May. Three deals of a total of 160,000 t were recently heard for standard Fe 57% fines at $65-67/t FoB east coast India from the east coast of India also three cargo deals of Fe 54/55% at $65-66/t CFR China concluded in this week. The Chinese buyers remained active in this week.
  
  
• Sponge iron prices inch down in Rourkela: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela decreased by INR 200/t ($2/t) w-o-w to INR 30,400/t ($364/t) today. Meanwhile, steel billet (100*100 mm) prices in Rourkela decreased by INR 850/t ($10/t) w-o-w to INR 43,350/t ($519/t) today.
  
  

Outlook

Iron ore offers in Odisha are expected to remain supportive in the near term amid increasing demand for raw materials in the domestic market amid volatility in pellets and steel prices.