India: SteelMint's Odisha iron ore fines index rises INR 100/t following shortage of high-grade material

SteelMint's weekly Odisha iron ore fines (Fe 62%) index increased INR 100/t w-o-w to INR 4,500/t ex-mines on 2 September, 2023 compared to the last assessment on 26 August. Lack of availability of high-grade ore and decent demand for fines led to the price increase in Odisha. India's iron ore production volumes fell from 22.5 mnt in June to 18.36 mnt in July. In August, volumes are likely to remain on the lower side - similar to July.

Pellet prices in Barbil increased by around to INR 900/t in the last two weeks following active demand and hike in sponge offers.

As per sources, market participants are waiting for this month's OMC auction and are buying material on need basis. The rising prices of raw pellets have given confidence to steelmakers to raise prices while miners are also keeping their offers high.

Rationale:

• T1- No deals were recorded and one was considered for price calculation this week. They were given 0% weightage for index calculation.
  
  
• T2- SteelMint received Nine (9) offers and indicative prices under T2 trade deals in this publishing window. Eight(8) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Factors supporting iron ore prices in Odisha-

• Pellet prices in Barbil, Durgapur rise by INR 300/t: Raw pellet (Fe63%, 6-20 mm) prices in Odisha's Barbil increased by INR 300/t compared to last week. The current assessment stands at INR 8,700/t loaded to wagons on 1 September. Raw pellet (Fe63%, 6-20 mm) prices in Durgapur sharply improved by INR 300/t w-o-w to INR 8,800/t exw on 1 September.
  
  
• Sponge prices rise in Rourkela: SteelMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela increased by INR 1,100/t to INR 32,300/t exw on 2 September compared to last week. On a m-o-m basis, sponge iron prices increased by INR 3,300/t. Billet prices also increased by INR 950/t w-o-w to INR 44,500 exw-Rourkela on 2 September. The active trade and increased offers supported semi-finished and finished steel prices in Rourkela.
  
  

Outlook

Merchant miners may raise offers in the upcoming days keeping in mind availability and logistics issue that are typical of the monsoon season.