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

SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,700/t ex-mines, as assessed on 15 April, 2023 compared to the last assessment on 7 April, 2023. Limited trade volumes were heard for Fe 62% amidst OMC's auction scheduled on 18 April, 2023.

Rationale:

• T1- No deal was recorded this week and thus given 0% weightage for index calculation.
  
  
• T2- SteelMint received Nine (9) offers and indicative prices under T2 trade deals in this publishing window. Eight (8) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Why iron ore index remains stable?

• PELLEX falls amid active trade: SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, fell by INR 300/t w-o-w to INR 9,300/tonne (t) DAP Raipur. Overall, deals of around 83,000 t were recorded at INR 9,150-9,350/t DAP Raipur in this week so far. However, as per sources, buyers were expecting reduction in iron ore prices from Odisha in upcoming days owing to fall in pellet offers. Iron ore pellet (Fe 63%) prices in Durgapur, West Bengal, stood at INR 9,750/t exw on 14 April, 2023, down by around INR 300/t m-o-m
  
  
• Sponge iron prices rangebound: Sponge iron prices in India exhibited mixed sentiments in key domestic markets. SteelMint's index for C-DRI (exw Rourkela) was calculated at INR 31,600/t as against INR 31,550/t a week ago. Sponge iron ore prices largely remained stable.
  
  

India iron ore prices:

Highlights from other states:

Recent Karnataka iron ore auctions receive a poor response - Vedanta conducted an auction for sale of 16,000 t of iron ore lumps (10-40mm, Fe61%) from its A. Narrain mines in Karnataka's Chitradurga district on 11 April, 2023. According to sources, the entire quantity was booked at INR 4,890/t against floor price of INR 4,690/t. Prices exclude royalty, DMF, and NMET.

However, U Krishna Prasad's auction for sale of 16,100 t of iron ore lumps (10-80mm, Fe58.42-63.52%) on 12 April, 2023, and Sri Kumaraswamy Mineral Exports Pvt Ltd (SKMEPL) auction for sale of 25,000 t of iron ore lumps (Fe63.1-64.5%) on 13 April, 2023 failed to attract buyers and the entire quantity remained unsold for both auctions.

Chandrapur iron ore offers firm: An iron ore miner based in Chandrapur, Maharashtra has kept lumps offers (5-18 mm, Fe 63%) unchanged at INR 8,700-8,800/t FOR Raipur and fines (Fe 63%) at INR 6,500-6,600/t FOR Raipur.

Outlook: Other merchant miners are waiting for OMC's Odisha iron ore auction before announcing fresh offers later next week. However, bid-offer disparity and fall in pellet prices hit market sentiments.