Domestic iron ore prices corrected downwards this week in recent deals on improved availability and lowering of bids. SteelMint’s weekly Odisha iron ore fines index (Fe 62%) has fallen sharply by INR 550/tonne (t), w-o-w, to INR 4,500/t ex-mines.
Iron ore availability in Odisha had improved after the High Court of Odisha granted one month’s time to the ex-lessees of the auctioned mines in Odisha to move out their material starting 15 Nov’21. Of these lessees, Serajuddin and KJS Ahluwalia were the two key miners holding a combined inventory of around 11 mn t of iron ore. Market participants informed that active trading was witnessed over the past week.
Rationale:
Deals (T1) SAIL conducted an auction on 15 Dec for 140,000 t of iron ore fines (Fe 62.5%) from the Bolani iron ore mines in Odisha. Out of the total quantity, it received bids for 56,000 t offered at INR 5,050/t (loaded, including royalty, DMF and NMET).
State-owned miner Odisha Mining Corp. (OMC) had scheduled an e-auction for iron ore fines and lumps on 17 Dec. Out of the total of 687,000 t of fines put to auction, 98% (676,000 t) received bids at INR 3,000-3,550/t ex-mines.
A trader concluded a deal for 16,000 t fines (Fe 61%) at INR 4,500/t and another deal for 16,000 t fines (Fe 60%) at INR 4,000/t ex-mines.
T2- SteelMint received seven (07) offers and indicative prices under T2 trades in this publishing window. Three (03) were taken into consideration and given 50% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here
Iron ore lump in demand at NMDC’s Chhattisgarh auction, fines lot unsold – NMDC conducted an auction on 16 Dec for 298,200 t of iron ore from the Kirandul and Bacheli mines in Chhattisgarh. The auction received good response for lump, with the entire quantity of DR-CLO and Baila lump ore getting sold, sources told SteelMint. Bids for DR-CLO increased by around INR 520/t, while those for Baila lumps remained at the base price. The balance lots for fines and ROM remained unsold.
Bid prices correct at NMDC’s Karnataka iron ore e-auction – NMDC conducted an iron ore e-auction on 16 Dec from its Kumarswamy mines at which 36,000 t was booked out of the total quantity of 44,000 t. The iron ore fines (Fe 60.5%) lot was booked at INR 3,371/t (basic, taxes extra), down by INR 170/t compared to the previous auction on 25 Nov.
Outlook: Market sources expect prices to remain range-bound with some room for downward correction considering improved production. India’s iron ore production increased sharply by 24%, month-on-month, in Oct’21 to 19.37 mn t.
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