SteelMint: Odisha iron ore fines index stable as market awaits OMC's auction

SteelMint's weekly Odisha iron ore fines (Fe 62%) index stood at INR 5,600/t ex-mines on 13 May, unchanged as compared to the last assessment on 6 May. The index was stable amid less active trading. A fall in pellet prices and limited trading have kept iron ore prices under pressure.

Rationale:

• T1- No deal was recorded and thus not considered for price calculation this week and given 0% weightage for index calculation.
  
  
• T2- SteelMint received eight (8) offers and indicative prices under T2 trade deals in this publishing window. All were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Why is iron ore index stable?

• PELLEX stable: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 8,750/t DAP Raipur on 12 May as compared to the previous assessment on 9 May. One of the prominent pellet makers shut down its plant for maintenance for the entire May month. However, other producers kept offers stable at INR 8,700-9,000/t ($106-109/t). As per sources, buyers are still awaiting clarity from the market as prices are volatile. The OMC's auction is also around the corner and buyers are keeping their eyes on it. They are only focused on need-based bookings on lower offers.
  
  
• Durgapur pellet prices fall: Durgapur pellet (Fe 63%) prices inched down by INR 100/t w-o-w to INR 8,900/t exw as sponge P-DRI prices fell by INR 150/t to INR 28,050/t DAP.
  
  
• Global iron ore prices drop w-o-w: Benchmark spot iron ore fines Fe 62% prices stood at $103/t CNF China on 12 May, decreasing marginally by $1/t w-o-w, against $104/t CNF China in the previous week. Prices dropped due to subdued steel demand in the domestic market. Meanwhile, falling iron ore futures also weighed on spot prices. DCE iron ore futures decreased by RMB 25/t ($4/t) d-o-d to RMB 699/t ($101/t) on the last trading day.
  
  

Outlook: As per sources, miners have not yet lowered offers and are holding them firm. They are waiting for the OMC's auction scheduled for next week.