India: Odisha iron ore fines index inches down w-o-w post-miners' offer revision

• Merchant miners drop offers by INR 500-700/t
  
  
• Sponge, billet move upward in last two-three days
  
  

BigMint's Odisha iron ore fines (Fe62%) index inched down by INR 50/t w-o-w to INR 4,750/t ($56/t) ex-mines on 29 June, 2024. No deals of standard Fe 62% fines deal recorded from the merchant miners. However, around 125,000 t iron ore deals were concluded in the Odisha region by the steelmakers this week.

The iron ore fines prices in Odisha remained largely stable while lumps prices fell this week as major miners revised their prices with some drop in the offers. The trades were concluded at lower prices as buyers booked few transactions this week. However, major miners dropped their offers by up to INR 500/t amid the falling bids in the OMC auction and downtrend in sponge and finished steel markets at the beginning of this week.

A miner said "We have dropped our offers post-OMC auction as inquiries from the buyers were at lower prices with some deals concluded at revised offers. The trade activities remained moderate in Odisha as steelmakers were restocking material before the monsoon. On the other hand, the drop in the pellet, sponge and steel prices is a matter of concern as some buyers hesitate to purchase even at dropped prices amid the price instability in the market. The trade may be increased in the near term as those who did not participate in the OMC auction will buy in the coming days."

Notably, the sponge iron and billet prices showed some recovery in the last couple of days of this week which may boost the market confidence for the raw material buying. However, sources said that the prices are still uncertain and this recovery will have to carry forward next week for positive market sentiments.

The raw pellet prices also fell by up to INR 500-700/t in the central-eastern region followed by downtrend market sentiments and buyers' resistance to purchasing at the higher offers.

Rationale:

• T1- No deals of Fe 62% fines were recorded in this publishing window so 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
  
  

Market highlights:

• Pellet offers fall w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha's Barbil significantly fell by INR 450/t ($8/t) w-o-w. The current assessment stands at INR 7,600/t ($96/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur decreased by INR 450/t ($6/t) w-o-w to INR 8,450/t ($107/t) exw on 28 June.
  
  
• Fines export prices stable w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $58/tonne (t) FOB east coast on 27 June 2024. An exporter from Odisha sold 55,000 t of Fe57% fines cargo last week at $72/t CFR China in this publishing window. In another deal, a miner from Odisha sold around 55,000 t of Fe54% fines in the export market at 32-33% ($62-63/t) discount to the benchmark price seen on the Fe62% index this week.
  
  
• Sponge iron prices stable w-o-w: BigMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela increased INR 300/t w-o-w to INR 26,750/t ($321/t) on 29 June. Meanwhile, steel billet (100*100 mm) prices in Rourkela dropped by INR 500/t ($6/t) w-o-w to INR 39,750/t ($476/t) today.
  
  

Outlook

Iron ore prices in Odisha are expected to remain stable at this level as miners expect some transactions at the current offers. However, buyers remained cautious this week but some recovery in steel prices may support trading activity in the raw material.

A trader said that buyers are still not clear about the prices as pellet and sponge iron fell at the beginning of the week. They are still in the wait-and-watch mode and may get clarity in the next week. The rainy season will also impact the material availability in the coming month as miners will have difficulty in the miners' operations.