SteelMint: Odisha iron ore fines index rises ahead of next week OMC's auction

SteelMint's weekly Odisha iron ore fines (Fe 62%) index increased by INR 100/t to INR 5,100/t ex-mines on 16 December, 2023. No bulk deals were witnessed for standard Fe 62% fines in this publishing window. Active raw pellet and low-grade fines export booking and high-grade material shortages in the market have pushed the iron ore prices in the region.

Iron ore fines shortage has been witnessed in the market as most of the miners' EC limit has been exhausted for this session. On the other hand, a few miners held their offer before next week's OMC iron ore auction and will revise it after the auction. Sources stated that the continuous export of iron ore fines from Odisha at decent prices has created a shortage of iron ore fines, and market participants are waiting for the OMC auction.

On the other hand, a few buyers had faced logistical hurdles amid a lack of rake availability, and a few of them did not get delivery of the old bookings from miners.

Few market sources opine that OMC may lift base prices for the 19 December auction, but no confirmation was received till the time of publishing this article.

Rationale:

• T1- No deal was recorded in this publishing window and not considered in price computation. It was given 0% weightage for index calculation.
  
  
• T2- SteelMint received Fourteen (14) offers and indicative prices under T2 trade deals in this publishing window. Eleven (11) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Factors driving Odisha iron ore prices:

• Barbil pellet prices rise by INR 250/t w-o-w: Pellet (6-20 mm, Fe 63%) prices in Odisha's Barbil increased by around INR 250/t w-o-w. The current assessment stands at INR 8,650/t loaded to wagon. Meanwhile, raw pellet (Fe 63%, 6-20 mm) prices in Durgapur surged by INR 100/t w-o-w to INR 9,500/t exw on 15 December.
  
  
• Active pellet export deals: SteelMint's India pellet (Fe 63%, 3% Al) export (FOB east coast) index increased by $2/t w-o-w to $128/t on 13 December, 2023. Total deals of 220,000 t of raw pellets were recorded in this publishing window. Eastern and Central India-based pellet manufacturers concluded deals on better realisation amid decent hike in global spot iron ore offers w-o-w.
  
  
• Increased fines export prices: SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $3/tonne (t) w-o-w to $87/t FOB east coast on 14 December, 2023. Totel deals of 165,000 t (Fe56/57%) were recorded from the east coast. However, a trader from Odisha concluded an 80,000 t deal for Fe 57% grade iron ore fines recently from the west coast of India.
  
  
• Rourkela sponge iron prices edge up w-o-w: SteelMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela increased by INR 150/t to INR 28,400/t exw on 16 December compared to last week. Meanwhile, steel billet (100*100 mm) prices in Rourkela rose by INR 300/t w-o-w to INR 40,000/t.
  
  

Outlook

Odisha's iron ore prices are expected to remain supportive in the coming days amid an active response from the export market and a supportive sponge iron and finished steel market. However, the market will be clearer after the OMC iron ore auction.