SteelMint: Odisha iron ore fines index inches up in recent deal

SteelMint's weekly Odisha iron ore fines (Fe 62%) index rose by INR 150/t to INR 5,400/tonne (t) ex-mines (including royalty, DMF and NMET). The market is trending upward due to the lack of high-grade raw material availability. However, limited deals were reported because of the decline in pellet and sponge iron prices this week.

Rationale:

• T1- A deal was reported for 30,000 t of fines (Fe 62%) at INR 5,350/t and taken into consideration for the index calculation and given 50% weightage.
  
  
• T2- SteelMint has included nine (09) offers and indicative prices under T2 trade deals in this publishing window. Out of this, six (06) were taken into consideration and given 50% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here
  
  

Factors driving up fines index:

• Lack of high-grade material: The availability of high-grade iron ore in Odisha is a big concern. Therefore, miners hiked offers post OMC's auction and received a positive response from the buyers too.
  
  
• Pellet trades in eastern India fall marginally: SteelMint's bi-weekly pellets (Fe 63%) assessment stood at INR 9,300-9,500/t, loaded to wagon in Barbil. Prices have fallen by INR 200/t w-o-w, amid limited trades and fall in enquiries.
  
  
• Merchant offers high: Odisha-based merchant miners kept iron ore offers firm this week and may announce fresh offers in the near term.
  
  

India iron ore prices:

Karnataka e-auctions receive decent response: SMIORE conducted an auction for 60,000 t of iron ore lumps out of which 12,000 t (5-20mm, Fe58.4%) was booked at INR 4,465/t, 8,000 t (5-20mm, Fe58%) at INR 4,415/t and 4,000 t (20-40mm, Fe59.2%) at INR 4,330/t (including royalty, DMF & NMET). Meanwhile, Vedanta's auction for 24,000 t of iron ore lumps (Fe57.5%) received bids for the total quantity at INR 4,076/t against the base price of INR 3,696/t (excluding royalty, DMF & NMET).