SteelMint: Odisha iron ore index falls further as miners cut prices

SteelMint's weekly Odisha iron ore fines and lumps indexes have fallen by INR 200- 400/t, w-o-w. Declining pellet offers have kept iron ore lump offers under pressure. Miners such as Essel Mining and also JSW Steel have cut offers this week.

Miners slash offers - JSW Steel has reduced iron ore offers this week from its mines in Odisha. Fines (Fe 62%) is assessed at INR 3,900/t (ex-mines basis, including royalty, DMF and NMET), lower by INR 500/t against mid-Sep'21. Recently, Essel mining has also cut offers for iron ore fines and lumps by around INR 400/t.

Domestic pellet prices fall to one-year low - As per SteelMint data, pellet prices in Odisha's Barbil have fallen by around INR 1,100 /t, w-o-w. SteelMint's bi-weekly domestic pellet (Fe 63%) index, PELLEX, declined sharply to INR 10,350/t DAP Raipur on 26 Nov, lower by INR 550/t against the last assessment of INR 10,900/t on 23 Nov. Prices have hit the lowest level in one year.

As per market sources, a trader from Odisha concluded a deal for 4,000 t of Fe 63% fines at INR 4,500/t (ex-mines, including royalty, DMF and NMET) this week. However, it was not factored into the index as it did not qualify, as per SteelMint methodology.

Rationale:

• A deal for Fe 63% fines was recorded but not considered as T1 trade and given 0% weightage in the index calculation for Fe 62% fines.

  
  
  

• SteelMint received around ten (10) offers and indicative prices under T2 trades in this publishing window. Eight (08) were taken into consideration and given 50% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here
  
  

Odisha iron ore prices:

OMC to auction 1.77 mn t of iron ore on 3 Dec'21

State-run Odisha Mining Corporation (OMC) has scheduled an iron ore fines and lumps auction on 3 Dec'21. Around 800,000 t of iron ore lumps and 968,000 t of fines will be put up for auction from OMC's mines. The base price of the auction is yet to be disclosed.

NMDC to auction nearly 300,000 t of iron ore from Chhattisgarh - Leading PSU miner National Mineral Development Corporation (NMDC) has scheduled two iron ore auctions. The first auction is for 222,600 t of Fe 64%-67% grade material from the company's Bacheli mines, while the second is for 75,600 t of Fe 64%-65.5% grade ore from the Kirandul mines - both in Chhattisgarh. The auctions are scheduled for 29 Nov'21.

Prices stable at recent Karnataka e-auction by private miners:
In a recent Karnataka e-auction conducted on 19 Nov, out of the total quantity of 633,356 t put to auction, 452,000 t was booked. JSW Steel Ltd. was the largest buyer at 224,000 t. The bid prices for iron ore fines (Fe 57.5%) from Vedanta remained stable at the auction at INR 2,450/t compared to the last auction on 9 Nov.

MECL to prepare five mining blocks for auction in Goa: The Goa Cabinet has approved a proposal from government body MECL for exploration and demarcation of five mining blocks in the state. Mining has been halted in the state since 2017 after Supreme Court cancelled the renewal of 88 leases. However, the SC's recent refusal to entertain a review petition seems to have put an end to this quest.