India: SteelMint's Odisha iron ore fines index stable as market awaits price revision post-holidays

SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,500/t ex-mines on 30 December, 2023. No bulk deals were witnessed for standard Fe62% fines in this publishing window. Active response in last week's OMC's auction and export deals have kept prices supported.

Iron ore prices remained supported in the Odisha region following the good participation in the previous week's auction and active export bookings in lower-grade fines. Most buyers booked iron ore in the OMC auction and currently watching the market trend.

The iron ore miners in Odisha facing material shortages of high-grade iron ore and though EC limit is also getting exhausted. However, a few big miners in Odisha revised the offers this week and increased the offers after higher bids in the OMC auction.

An Odisha-based buyer said: "raw material prices increased in the region but demand for sponge iron and finished steel on a downtrend mode led the prices fall. Buyers cautiously booked material from merchant miners in the last few days while few booked material from traders at negotiable prices. However, the price trend in the market is not clearer even after ten days of the OMC auction. Some miners holding the offers and will revise in the first week of CY 2024."

On the other hand, few steelmakers worried about higher iron ore prices in the central-eastern market led the pellet prices increased sharply however steel prices gone inversely through out the week.

Rationale:

• T1- No deal was considered in this publishing window under price computation. It was given 0% weightage for index calculation.
  
  
• T2- SteelMint received eleven (11) offers and indicative prices under T2 trade deals in this publishing window. Nine (09) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Factors driving Odisha iron ore prices:

• Barbil pellet prices rise by INR 150/t w-o-w: Pellet (6-20 mm, Fe 63%) prices in Odisha's Barbil increased by around INR 150/t w-o-w. The current assessment stands at INR 9,600/t loaded to wagon. Meanwhile, pellet (Fe 63%, 6-20 mm) prices in Durgapur rose by INR 100/t w-o-w to INR 10,000/t exw on 29 December.
  
  
• Active pellet export deals: SteelMint's India pellet (Fe 63%, 3% Al) export (FOB east coast) index increased by $5/t w-o-w to $131/t on 27 December 2023. In this publishing window, One export deal of 55,000 t of raw pellets (Fe 63%) from eastern India was concluded at $145/t CFR China last week. A South India-based pellet maker had floated an export tender for 50,000 t of material (Fe 63%; Al2O3- less than 2%) on 29 December, 2023. As per sources, the tender was heard concluded at around $137-138/t FOB.
  
  
• Rising iron ore fines export prices: SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $1/tonne (t) w-o-w to $93/t FOB east coast on 28 December, 2023. The iron ore export index recorded around 2.5 year-high, previously; it was seen in the first half of June 2021. No deals of standard Fe57% fines were recorded for export from the East Coast in this publishing window. However, total deals of 340,000 t fines (Fe54-57%) were recorded from eastern and southern India in the last one week for exports.
  
  

Outlook

Odisha's iron ore prices are expected to remain supportive in the near term as buyers expect price revisions from miners. Increased iron ore and pellet export prices may also support the iron ore prices in Odisha as Chinese buyers will restock the material for the next two to three weeks before the Lunar holidays. However, southward sponge and finished steel prices may impact reverse the iron ore prices in Odisha.