India: SteelMint's Odisha iron ore fines index rises to over 2-month high

SteelMint's weekly Odisha iron ore fines (Fe 62%) index increased by INR 350/t w-o-w to INR 4,950/t ex-mines on 16 September, 2023 compared to the last assessment on 2 September. The index, rising three weeks in a row, rose to over two-month high as similar levels were seen in early July'23. Limited offers by merchant miners and hike in base prices by OMC for its September auction supported the index.

As per sources, due to heavy rain in the region, miners are facing difficulty in continuing operations, followed by a hike in pellet and semi-finished steel prices m-o-m, which pushed iron ore prices higher in Odisha.

Odisha Mining Corporation (OMC) has scheduled an auction for 2.87 mnt of iron ore (2.25 mnt of fines and 0.62 mnt of lumps) on 18 September. It has increased iron ore fines base prices by INR 750/t and lumps by INR 700/t compared to the auction held on 18 August.

Rationale:

• T1- No deal was recorded so not considered for price calculation this week. They were given a 0% weightage for index calculation.
  
  
• T2- SteelMint received eight (8) offers and indicative prices under T2 trade deals in this publishing window. Seven (7) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Pellet and sponge market dynamics in Odisha-

• Pellet prices in Barbil, Durgapur rise m-o-m: A similar hike was seen in raw pellet (Fe63%, 6-20 mm) prices in Durgapur, which were assessed at INR 9,200/t exw on 15 September. However, prices in Odisha's Barbil inched down by INR 100/t compared to last week. The current assessment stands at INR 8,700/t loaded to wagons on 15 September.
  
  
• Sponge prices rise in Rourkela: SteelMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela increased by INR 450/t to INR 32,000/t exw on 16 September compared to last week. However, m-o-m, sponge iron prices increased by INR 3,000/t. Billet prices also increased by INR 950/t w-o-w to INR 44,500/t exw-Rourkela on 16 September.
  
  

Outlook

Market participants are waiting for OMC's iron ore auction on 18 September. Amidst low inventories with pellet and sponge players, the auction may see active participation.