SteelMint: Odisha iron ore fines index edges up on active pellet export bookings

SteelMint's weekly Odisha iron ore fines (Fe 62%) index increased marginally w-o-w by INR 50/t to INR 4,900/t ex-mines on 11 November, 2023.

The Odisha iron ore market saw mixed sentiments this week, as most miners have limited inventory of high-grade iron ore fines. On the other hand, pellet export market offers improved significantly over the last few days on active Chinese buying, and export realisation is better than domestic.

"High-grade iron ore fines prices might increase post-Diwali festival on active pellet export bookings and low grade fines", an Odisha-based miner mentioned.

Rationale:

• T1- Two deals were recorded this week and considered for price calculation. It was given 50% weightage for index calculation.
  
  
• T2- SteelMint received five (5) offers and indicative prices under T2 trade deals in this publishing window. Two (2) were taken into consideration and given 50% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Factors supporting Odisha iron ore prices:

• Rise in pellet export prices on global price hike: SteelMint's India pellet (Fe 63%, 3% Al) export (FOB east coast) index increased by $6/t w-o-w to $125/t on 8 November, 2023. The Indian pellet export market sentiments improved this week, following the demand from China and other regions as well. Notably, the realisation gap between domestic and export has been widened, and currently, the export rate is higher than domestic, which had attracted plants to sell material in the export market.
  
  
• Barbil pellet prices rise by INR 100/t w-o-w: Pellet (6-20 mm, Fe 63%) prices in Odisha's Barbil increased by around INR 100/t w-o-w. The current assessment stands at INR 8,350/t loaded to wagon. Meanwhile, raw pellet (Fe 63%, 6-20 mm) prices in Durgapur inched up by INR 100/t w-o-w to INR 8,900/t exw on 10 November.
  
  
• Supportive iron ore export realisations: SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $83/t FOB east coast on 9 November, 2023. The Indian iron ore export market remained supported amid improved global spot and futures prices. Offers have remained firm over the last two weeks.
  
  
• Rourkela sponge iron prices stable w-o-w: SteelMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela remained stable at INR 29,000/t exw on 11 November compared to last week. Meanwhile, steel billet (100*100 mm) prices in Rourkela also remained unchanged w-o-w at INR 40,500/t.
  
  

Outlook

Odisha iron ore prices is expected to increase in the coming weeks amid higher iron ore export realisations. The market is expected to improve post festivals with improved inquiries. Meanwhile, market participants are also waiting for Odisha Mining Corporation's (OMC's) iron ore auction to get a better price clarity.