SteelMint: Odisha iron ore index falls on competitive pellet offers

SteelMint's weekly Odisha iron ore fines and lump indexes have fallen by INR 400-750/t, w-o-w. Competitive pellet offers kept iron ore lump trades subdued in Odisha.

SteelMint's Odisha iron ore lump (5-18mm, Fe 63%) index stands at INR 9,700/t ex-mines. On the other hand, Barbil pellet prices were assessed at INR 9,800/t loaded on to wagons on 19 Nov'21. A few sources also informed about offers even lower at INR 9,000-9,500/t loaded on to wagons. Thus, highly competitive pellet offers kept enquiries for iron ore lumps on the lower side.

On the other hand, SteelMint's fines (Fe 62%) index decreased by INR 400/t to INR 5,550/t (ex-mines, including royalty, DMF and NMET). As per market sources, a major steelmaker from Odisha concluded a deal of around 80,000 t at INR 5,700/t (ex-mines, including royalty, DMF and NMET) this week.

As far as the import scenario is concerned, Chinese spot iron ore fines Fe 62% prices opened at $89.15/t CNF China for the week and increased to $91.3/t CNF China towards weekend. Seaborne iron ore prices fell slightly on 15 Nov'21 on continued low liquidity and pessimistic market outlook. So far, just one imported fines booking from Australia has been confirmed for end-Dec arrival.

Rationale:

• A deal for Fe 62% fines was considered for price calculation and taken as T1 trade. It was given 50% weightage in the index calculation for Fe 62% fines.
  
  
• SteelMint received around nine (09) offers and indicative prices under T2 trades in this publishing window. Six (06) were taken into consideration and given 50% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here
  
  

Market highlights:

• Odisha Mining Corporation (OMC) had scheduled an e-auction for seized iron ore fines (Fe 63.11%) on 12 Nov. The allotted quantity of 25,000 t was being offered by Paradip Port with the base price at INR 8,100/t (including royalty, DMF and NMET). According to latest information available with SteelMint, the auction failed to fetch any response.
  
  
• The Orissa Mineral Development Company Ltd. (OMDC) had issued an auction notice for sale of 19,034 t of crushed iron ore fines and lumps (in the Fe 58.24%-65.1% range) from its Bhadrasahi iron and manganese mines in Odisha's Keonjhar district. The due date of the tender was 17 Sep. According to latest updates, the auction has been postponed to 20 Nov.
  
  
• Steel major JSW Steel had scheduled an auction for 1.18 mn t of iron ore fines (Fe 57%) on 19 Nov. The entire quantity was booked at INR 710/t ex-mines against the set base price at INR 700/t ex-mines. This transaction was included for calculation of the index.
  
  

Odisha iron ore prices: