India: Odisha Merchant Miner's 2nd Iron Ore Price Hike, Will it Sustain?

Few of the major Odisha based major merchant miners including Rungta Mines, RP Sao, KJS Ahluwalia, and Kaypee Enterprises have raised iron ore offers today. This is a 2nd price hike announced by them in a month's time.

As per sources, the miners have announced hike of INR 300/MT in lumps and INR 200/MT in fines w.e f today.

Prior to this miners had raised offers by same quantum a couple of weeks back.

After revision, offers of KJS Ahluwalia Mines is as follows: 5-18mm is at INR 4,550/MT and for fines is at INR 2500/MT ex-mines, including Royalty, DMF & NMET, GST extra).

As per market reports, miners have increased offers following hike in global offers which has increased export realizations. Fe 62% fines index ramped up to USD 108/MT. In line with this, Chinese mills raised bids for low-grade Indian iron ore fines by USD 2-3. Fe 58/57% fines at around USD 72-73/MT, CFR China.

Will 2nd price hike by Odisha miners sustain - SteelMint analysis

SteelMint in conversation with market participants learned that although miners have raised offers but the acceptability of the same seems skeptical owing to less support from sponge prices. Sponge prices in eastern India (Durgapur) are similar to the levels hovering a month back. Current assessment for C-DRI stands at USD 19,500/MT (down by INR 200 against last week).

Also after pellet makers raised domestic offers, trade volumes have remained limited. Durgapur pellet price assessment stands at INR 7,000-7,100/MT (up by INR 1200/MT against last month).

Considering sharp price hike in raw material (iron ore/pellet) offers and comparatively stable sponge prices, it would be interesting to see if the 2nd price hike taken by Odisha miners will be absorbed by the market or not.