India: Will Odisha Merchant Miners Slash Iron Ore Offers?
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Odisha based major merchant miners continue to hold iron ore offers in the month of Mar'19 except Essel Mining which had cut offers by INR 300-400/MT towards the beginning of the month. SteelMint in conversation with market participants learned that market participants are expecting offers to move down in near short term considering decline in pellet & sponge prices. However, miners are yet to announce any revision.
Few of the major merchant miners namely - KJS Ahluwalia, Kaypee Enterprises, KN Ram and Indrani Patnaik are learned to have utilized their EC limits for the year and hence are not offering decent quantities.
Currently, trade prices in Odisha are assessed around INR 2,000/MT (ex-mines) for fines Fe 63% grade and around INR 4,400/MT for 5-18 mm. Prices including Royalty, DMF, NMET, and GST extra.
Which all factors may result in reduction in iron ore offers?
1. Decline in sponge prices-: P-DRI prices for Durgapur declined sharply by INR 500/MT W-o-W to INR 18,000/MT as against INR 18,500/MT. C-DRI prices in Durgapur also declines by INR 500/MT to INR 19,200/MT against last week assessment at INR 19,700/MT.
2. Fall in domestic pellet offers-: SteelMint's assessment for pellets in Durgapur region has come down by INR 800/MT in a month's time and by around INR 300/MT in a week's time.
As per the sources report to SteelMint, a Raigarh based pellet maker is learned to have lowered pellet offers to INR 5,800/MT (ex-Raigarh) so landed to Raipur would be around INR 6,500/MT. Current Ex-Raipur offers for pellet at INR 6,700/MT. Competitive offers from Raigarh may keep Raipur pellet prices under pressure. In a month's time, Raipur pellet offers have come down by INR 900/MT.
3. Lowered pellet export offers amid falling Chinese demand- Although no firm bids/offers were heard, but currently SteelMint's assessment for India pellet export stands at around USD 116-117/MT, CFR China, down by USD 5-6/MT M-o-M. Chinese mills continue to prefer low-grade iron ore which in turn kept inquiries for Indian pellets on the lower side.
