SteelMint: Odisha iron ore index rises with surge in offers for high-grade ore

SteelMint's weekly Odisha iron ore fines index (Fe 62%) moved up by INR 100/t, w-o-w, to INR 5,400/t ex-mines. Limited availability of high-grade material (Fe 62-63%) in the merchant market has led to rising premium for high-grade ore and the widening price gap with lower grades. A few merchant miners were even heard floating offers at INR 5,500-6,000/t ex-mines for Fe 62% fines, given limited stocks.

Rationale:

• No confirmed deal was reported hence not considered under the calculation of the Fe 62% fines index and given 50% weightage.
  
  
• T2- SteelMint received eleven (11) offers and indicative prices under T2 trades in this publishing window. Eight (08) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here
  
  

Lump prices rally in recent auction - The iron ore e-auction conducted by the Industrial Corporation of Odisha (IDCOL) on 1 Feb'22 for 19,000 t of calibrated lump ore (CLO) from the company's Roida 'C' mine in Odisha not only received active participation but also witnessed a sharp uptick in prices. Bid prices for lump ore (5-18mm, Fe 62-65%) rose by INR 2,100-2,700/t against the floor price of INR 7,500/t to INR 9,600-10,200/t.

Hike in pellet offers have lent support to lump prices. SteelMint's domestic pellet (Fe 63%) index, PELLEX, stood at INR 12,150/t DAP Raipur on 4 Feb. Recovery in export sentiments and rising coal and sponge iron prices have pushed pellet offers higher.

Odisha iron ore prices:

NMDC raises prices by up to INR 350/t for Feb : India's largest iron ore miner, NMDC, has raised prices by INR 200-350/t ($3-5) for Feb'22 deliveries. The revised offers are as follows:

• DR CLO (10-40mm, Fe 67%) - INR 6,040/t (+350/t)
  
  
• Baila fines (Fe 64%) - INR 4,260/t (+200/t)
  
  

Bids climb at NMDC's auction from Kumaraswamy - NMDC conducted an iron ore e-auction on 3 Feb from its Kumaraswamy mines in which the entire quantity of 353,000 t was booked.

• Iron are lump (Fe 63.98%) was booked at INR 3,875-3,885/t (basic, taxes extra), up INR 200/t compared to the previous auction on 19 Jan.
  
  
• JSW Steel emerged as the largest buyer, with bookings at 176,000 t, followed by Vedanta Limited at 40,000 t.
  
  

About 66% of total quantity sold in Goa e-auction, bids rise sharply: The Goa government organised the 27th e-auction for 2.217 mnt of iron ore on 19 Jan. About 1.45 mnt (66%) was booked out of the total offered quantity. Out of the total offered quantity, 1.33 mnt was run-of-mine (ROM) of grades ranging from Fe 28.53% to Fe 62.16%, 0.46 mnt were fines having with Fe content of 18.6-61.64%, 0.08 mnt of lump ranging from Fe 38.94%-62.16% and 0.35 mnt were tailings ranging from Fe 43.33%-48.88%.

The base price for the material offered was in the range of INR 300-450/t while bids fetched were in the range of INR 300-5,930/t. Thus, the price difference between bids and base price was upto INR 5,480/t.