SteelMint: Odisha iron ore fines index falls INR 400/t in recent auctions

SteelMint's weekly Odisha iron ore fines index (Fe 62%) moved down by around INR 400/t w-o-w to INR 3,250/t ex-mines. With a good amount of fines supplies being seen in the merchant market this week, buyers showed an active response in the recent auctions conducted by AM/NS India and Vedanta ESL.

ArcelorMittal Nippon Steel India Ltd (AM/NS) conducted two iron ore auctions from Odisha. The first auction was for 100,000 t fines (Fe 60-62%) from its Thakurani mines while the second auction was for 10,000 t fines (Fe 62-65%) from the Sagasahi mines. According to sources, the entire quantity in both the auctions were booked at the base price of INR 2,550 and 3,250/t (including royalty, DMF) respectively.

Also, as per sources, owing to fall in other commodities related to steel in eastern India (like pellets and sponge iron) bids for iron ore remained on the lower side. However, the shortage of raw material is still persisting in lumps which have kept prices supported.

Rationale:

• T1- One confirmed deal was reported for high grade ore (Fe 62%) and considered for index calculation. Therefore, 50% weightage was given in this week.
  
  
• T2- SteelMint received ten (10) offers and indicative prices under T2 trade deals in this publishing window out of which seven (07) were taken into consideration and given 50% weightage. To check SteelMint's iron ore assessment, pricing methodology and specification documents Click here.
  
  

A decent amount of auctions are lined up for the next week as well. Steel major JSW Steel Ltd has scheduled an auction for 51,350 t of iron ore lumps (Fe61-62%) on 8 August and for 252,800 t of iron ore fines (Fe 61-62%) on 10 August.

Highlights from other states:

• 24,000 t of iron ore lumps booked at Vedanta's Karnataka auction: Vedanta had scheduled an auction on 5 August for sale of iron ore lumps from its A. Narrain mines in Karnataka's Chitradurga district. According to market sources, the entire quantity of 24,000 t of lumps (Fe59.75%) was booked at around INR 4,359/t as against the base price of INR 3,249/t (excluding royalty, DMF and NMET).
  
  
• Maharashtra-based miner keeps offer stable: A Maharashtra-based iron ore miner has kept offers stable. Offers for lumps (5-18mm, Fe 63%) were recorded at INR 8,000/t FOR Raipur - same as last week. Also, iron ore fines Fe 63% stand at INR 4,500/t FOR Raipur.