SteelMint: Odisha iron ore fines index stable amid slow trade

SteelMint's weekly Odisha iron ore fines index (Fe 62%) remained stable w-o-w at INR 3,400/t ex-mines. No deals were reported in this week as market participants have not seen much interest in the current offers prevailing in the market. A drop in pellet and sponge offers have limited active bids for iron ore purchases, highlighted sources.

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,400/tonne (t) DAP Raipur on 26 August, 2022, down INR 300/t compared to the last assessment on 23 August due to the decline in bids and competitive offers from eastern India. SteelMint's daily sponge iron, CDRI, index was assessed at INR 35,800/tonne (t) exw Rourkela on 27 August, 2022. The index has fallen by INR 400/t w-o-w.

The ongoing monsoon season also impacted the market from the iron ore supply point of view. Hence, miners are largely holding offers firm.

Rationale:

T1- No deal was recorded for high grade ore (Fe 62%) index calculation. Therefore, no weightage was given to it this week.
T2- SteelMint received twelve (12) offers and indicative prices under T2 trade deals in this publishing window out of which nine (09) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology and specification documents Click here.

Odisha iron ore prices:

Highlights from other states:

• NMDC announces auctions for over 290,000 t of iron ore from Chhattisgarh: NMDC has scheduled two iron ore auctions from Chhattisgarh. The first is for 159,600 t of both fines and lumps (Fe64-67%, indicative) from the Bacheli mines, while the second is for 134,400 t of fines and lumps (Fe64-65.50%, indicative) from the Kirandul mines. Both auctions are scheduled for 29 August.
  
  
• Around 20,000 t of iron ore fines booked in R. Praveen Chandra's auction, Karnataka: Ramamurthy Praveen Chandra held an iron ore auction of 148,000 t of fines (Fe58.4-58.5%) on 25 August from Chitradurga, Karnataka. According to market sources, only 20,000 t were booked at the base price of around INR 1,304-1,313/t. Prices are exclusive of royalty, DMF and NMET charges.
  
  
• Supreme Court raises iron ore production cap in Karnataka to 50 mnt from 35 mnt: In a significant development, India's Supreme Court has raised the iron ore production ceiling in Karnataka from the current 35 million tonnes (mnt) to 50 mnt from the A and B category mines in the state.The production cap in Bellary has been raised to 35 mnt from 28 mnt, while in Chitradurga the ceiling has been raised to 15 mnt from the erstwhile 7 mnt.
  
  
• Chandrapur miner resumes offering iron ore: A Chandrapur-based miner sold around 50,000 t of fines (Fe 63%) at INR 4,600/t FOR Raipur and another 40,000 t in the local market at INR 3,700-3,800/t (loaded to the wagon). They have started giving offers for fines and are likely to resume offers for few grades of lumps from next week onwards. Notably, the miner had suspended offers in the past few weeks owing to pending deliveries of old bookings amidst monsoons.