SteelMint: Odisha iron ore fines index falls tracking decline in offers by major miners

SteelMint's weekly Odisha iron ore fines (Fe 62%) index has fallen by around INR 100/t to INR 8,700/t (ex-mines, including royalty, DMF and NMET). After the decline in offers by Essel Mining, announced on 31 Jul'21, other miners such as Rungta Sons, JSW Steel and SN Mohanty have slashed offers this week. Limited offtake at elevated offers due to lower margins of en-users resulted in the decline in iron ore offers.

Major merchant miner Rungta Sons Pvt Ltd., slashed iron ore fines prices by INR 1,000/t this week. JSW Steel revised down iron ore lump offers by INR 600-1,300/t and also cut offers for high-grade fines by INR 1,000/t. The revised prices came into effect from 6 Aug'21, SteelMint gathered from sources. However, delivery is subject to availability.

Recent trade and rationale:

• SteelMint received ten (10) offers and indicative prices under T2 trade in this publishing window. Nine (09) were taken into consideration and given 100% weightage in the absence of trades (T1). To check out SteelMint's iron ore assessments, pricing methodology and specification documents Click here
  
  
• SteelMint's iron ore lump (5-18mm, Fe 63%) index stands at INR 12,500-12,700/t (ex-mines, inclusive of royalty, DMF and NMET). A few deals were heard in this publishing window for around 8,000 t of crushed lump (10-40 mm, Fe 60%) at INR 11,000/t (ex-mines, inclusive of royalty, DMF and NMET).
  
  

NMDC cuts iron ore prices for Aug'21 deliveries - India's largest government-owned merchant iron ore miner, NMDC, has cut iron ore prices for Aug'21 deliveries by INR 200-350/t ($3-5/t). Drop in bids at OMC's iron ore lump e-auction, decline in offers by Odisha's private merchant miners and declining global iron ore prices resulted in the drop in offers.

NMDC produced 3.06 mn t of iron ore in Jul'21, up 40% as against 2.19 mn t in Jul'20, SteelMint learnt from the state-owned miner's recent BSE disclosure. Out of the total volume produced in Jul'21, the miner recorded a major chunk of output from its Chhattisgarh mines at 2.08 mn t and the remaining 0.98 mn t from the Karnataka mines.

FoR prices in INR/t, excluding taxes
Source: SteelMint Research

NMDC's Kumaraswamy auction elicits good response - NMDC's auction from the Kumaraswamy mines on 5 Aug'21 saw 162,000 t of material getting booked out of the total quantity put to auction. JSW Steel Ltd. emerged as the largest buyer by booking 120,000 t of iron ore fines followed by Vanya Steels Private Limited at 8,000 t of iron ore lumps.

An iron ore lump (Fe 63.14%) lot was booked at INR 6,723/t (basic, taxes extra), up marginally by INR 20/t as against the previous auction on 27 Jul at which similar grade material was sold at INR 6,703/t (basic).