SteelMint's Odisha iron ore fines index inches down

SteelMint's weekly Odisha iron ore fines (Fe 62%) index decreased by INR 150/t to INR 4,800/t ex-mines on 8 July, 2023 compared to the last assessment on 1 July. As per sources, the bids are still on the lower side, given the lower pellet prices.

Sources informed SteelMint that iron ore dispatches from Odisha have also decreased in the last month. The recent auctions conducted this week have received a subdued response. Many of the pellet makers are seen blending Odisha ore from other regions like - Chandrapur etc.

Rationale:

• T1- No deal was recorded and thus not considered for price calculation this week; given 0% weightage for index calculation.
  
  
• T2- SteelMint received twelve (12) offers and indicative prices under T2 trade deals in this publishing window. Eleven (11) were taken into consideration and given 100% weightage. To check SteelMint's iron ore assessment, pricing methodology, and specification documents Click here.
  
  

Factor which weighed down on Odisha iron ore:

• Pellet prices inch down in Barbil: Raw pellet (Fe63%, 6-20 mm) prices in Odisha's Barbil fell by INR 100/t this week and INR 500/t in the last two weeks. The current assessment stands at INR 7,700/t loaded to wagons on 7 July as compared to 23 June.
  
  
• Sponge prices fall in Rourkela: SteelMint's assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela decreased by INR 550/t to INR 27,700/t exw on 1 July compared to last week. Billet prices decreased by INR 800/t w-o-w to INR 41,400 exw Rourkela on 8 July.
  
  
• Gap between pellet realisations in export and domestic narrows down: India's pellet export index remained range-bound w-o-w at $108/t FOB on 5 July. Domestic pellet (Fe 63%) prices stood at INR 7,700/t loaded on to wagon for Barbil, eastern India. On the other hand, SteelMint's pellet export ex-plant price realisation for the Barbil region stood at around INR 7,300-7,400/t this week.
  
  
• China spot iron ore prices fall w-o-w: Chinese spot iron ore fines Fe 62% prices decreased by $2.15/t w-o-w to $109.45/t CNF China on 7 July, 2023. Iron ore prices fell amid thin buying activity and macroeconomic issues. Participants in China's market noticed a dramatic decline in portside pricing, in accordance with the futures market's decrease. Most of the traders were hesitant to offer at China portside, preferring to wait for a clear market trend.
  
  

Outlook

Market participants are expecting price cuts in iron ore in the coming weeks amid lower margins being experienced by pellet makers. Decrease in global iron ore and Indian raw material export prices may keep the material under pressure.