SteelMint: Odisha iron ore fines index remains stable on less trade

SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,400/t ex-mines. Apart from purchases in auctions conducted by ESL, AM/NS India and OMC (unsold ore), hardly other deals were reported this week.

Market participants did not show much interest in the prevailing price on the fall of pellets and sponge iron offers. Buyers are eagerly waiting for OMC's auction for this month and expected some positive moves from the auction until then market is silent.

On the other hand, Odisha-based market players also facing rake availability issues from the past quite some time which has led the market more concerned for supply side in the mineral-rich state.

Rationale:

• T1- No deal was reported in fines (Fe 62%) therefore not taken into consideration for the index calculation and given 0% weightage.
  
  
• T2- SteelMint has included nine (9) offers and indicative prices under T2 trade deals in this publishing window. Out of this, six (6) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here
  
  

The key factors behind limited deals in iron ore were price drop in pellets and sponge iron. SteelMint's bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 10,000/tonne (t) DAP Raipur, inching down by INR 100/t compared to the last assessment on 7 February, 2023. Sponge iron prices fell by up to INR 1,000/t w-o-w in key locations of the country.

India iron ore prices:

Key highlights from other states:

• NMDC to auction over 350,000 t of iron ore from Chhattisgarh: NMDC has scheduled two iron ore auctions from Chhattisgarh. The first auction is for 222,600 t of Fe 64-67% (indicative) grade material from its Bacheli mines, and the second is for 176,400 t of Fe 64-65.5% (indicative) grade ore from Kirandul mines. Both the auctions are scheduled for 17 February, 2023 and the material will be delivered FOR (by rail) ex-mine.
  
  
• Karnataka e-auctions receive decent response: NMDC conducted an auction for 558,000 t of iron ore from its Kumaraswamy mines in Karnataka on 7 February, 2023. Out of which, 188,000 t of lumps (10-40mm, Fe59.50-64.97%) were booked at the base price of INR 2,892-3,752/t and 296,000 t of fines (Fe58.24-63.68%) at the base price of INR 2,566-3,321/t. All prices exclude royalty, DMF, and NMET charges.
  
  

Meanwhile, Karnataka State Minerals Corporation Ltd (KSMCL) conducted two iron ore auctions for a total of 397,998 t from Sandur on 10 February, 2023. 242,000 t of fines (Fe57.05-62.38%) were booked at INR 2,407-3,351/t against the base price of INR 2,407-3,171/t while 77,700 t of lumps (Fe54.18-63.97%) were booked at the floor price of INR 2,061-3,692/t. Prices are excluding royalty, DMF, and NMET charges).