SteelMint: Odisha iron ore fines index stable post OMC auction

SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,700/t ex-mines. Apart from the auction conducted by state-owned miner, Orissa Mining Corporation (OMC), not much trades were heard. Owing to exhausting their environmental clearance (EC) limits led the availability issue keeping the iron ore offer firm from other miners in Odisha. However, drop in sponge iron prices kept iron ore trades subdued.

Odisha Mining Corporation (OMC) has conducted an auction for 494,000 t of iron ore fines (Fe54-64%) and 404,000 t of iron ore lumps (Fe60-65%) on 16 March, 2023. Around, 456,000 t of fines were booked at INR 3,150-6,600/t and 277,000 t of lumps were booked at INR 6,150-10,600/t.

Bids remained close to the base price except for some lots for which prices increased by INR 50-650 for fines and INR 100-650/t for lumps. The miner had increased the base price for fines by up to INR 1,050/t and INR 490/t for both fines and lumps, respectively.

Rationale:

• T1- Three deals of OMC were taken into consideration around 154,000 t of fines (Fe 62%) and, therefore, for the index calculation. Given 50% weightage.
  
  
• T2- SteelMint has included eight (8) offers and indicative prices under T2 trade deals in this publishing window. All were taken into consideration and given 50% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

SteelMint's bi-weekly domestic pellets (Fe 63%) index, PELLEX, inched down by around INR 100/t w-o-w to INR 9,900/tonne (t) DAP Raipur compared to the last week. No deal was recorded in this week as market participants showed least interest in buying pellets at current offers.

India iron ore prices:

Highlights from other states:

• Karnataka iron ore auction receives active response: SMIORE conducted around 221,000 t of iron ore auction from Bellary, Karnataka on 15 March, 2023. According to sources, 4,000 t of lumps (20-40mm, Fe59.20%) were booked at INR 4,310/t, 136,000 t of fines (Fe57-57.5%) at INR 3,110-3,420/t, 60,000 t of fines (Fe57.6%) at INR 3,445-3,455/t, 12,000 t of fines (Fe57.7%) at INR 3,470/t and 8,000 t of fines (Fe58.7%) at INR 3,435/t. Prices include royalty, DMF, and NMET.

  Meanwhile, At VESCO's 52,000 t of lumps auction, 8,000 t (Fe64.40%) was booked at a base price of INR 5,850/t and 12,000 t (Fe64.70%) was sold at INR 5,450/t.
  
  

• Chandrapur iron ore offers remain stable- A Chandrapur, Maharashtra-based iron ore miner has kept lumps offers (5-18mm, Fe 63%) unchanged at INR 8,700-8,800/t FOR Raipur and fines (Fe 63%) offer at INR 6,500-6,600/t FoR Raipur.
  
  

Outlook: The market is awaiting price revision by India's largest iron ore miner NMDC.