SteelMint: Odisha iron ore fines index stable, while market waits for OMC auction

SteelMint's weekly Odisha iron ore fines (Fe 62%) index remained largely stable at INR 3,400/t ex-mines.

However, buyers are waiting for Odisha Mining Corporation's (OMC) auction, which is round the corner and market participants are expecting improved participation given the low level of stocks with plants.

SteelMint data shows that closing (pithead) stocks of iron ore in Odisha increased sharply by over 17% m-o-m in May to above 62 mnt from around 53 mnt in April. Mine head stocks rose further to 66 mnt in June before falling to roughly 64 mnt in July. The rise in closing stocks clearly reflects the slow pace of iron ore drawdown by the mills on weak market sentiments.

State-run OMC has scheduled an auction for iron ore fines and lumps on 19 September. Around 1.049 mnt of fines and 690,000 t of lumps will be put up for auction from OMC's mines. The PSU miner has decreased the base price for fines by up to INR 200/t, whereas the base price for lump ore remains unchanged as against the last auction on 19 August.

SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,100/tonne (t) DAP Raipur on 16 September, stable against last week's assessment. Falling sponge iron prices kept buying interest on the lower side.

Rationale:

• T1- No deal was heard to be concluded recently therefore not considered for the index calculation. Therefore, 0% weightage was given to it.
  
  
  
• T2- SteelMint received ten (10) 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:

• Chandrapur miner resumes iron ore lump offers: A miner in Chandrapur has resumed offering iron ore lumps (5-18 Fe 63%) at around INR 8,500/t FOR Raipur from this week. Iron ore fines (Fe 63%) remained at INR 3,500/t FOR Ballarshah.
  
  
• 12,000 t of lump ore booked at Vedanta's auction: Vedanta scheduled an auction today for sale of iron ore lumps from its A. Narrain mines in Karnataka's Chitradurga district. According to market sources, the entire quantity of 12,000 t of lump (Fe59.5%) was booked at a price of INR 4,621/t (exclusive of royalty, DMF and NMET), higher by INR 532/t compared to the floor price of INR 4,089/t.