SteelMint: Odisha iron ore index stable despite muted trades during holidays

The domestic iron ore market exhibited volatility this week. Prices in Odisha remained largely unaltered with no changes observed in offers floated by the merchant miners. However, PSU miner NMDC slashed prices by up to INR 500/t.

The dometic market saw limited trades in fines as well as lumps. No high-grade fines auction was conducted by SAIL this week: the steelmaker conducted an auction for 60,000 t of iron ore fines (Fe 60.5%-indicative) from the Barsua iron ore mines in Odisha which failed to fetch any response from buyers. The base price had been set at INR 4,600/t FOR which included royalty, DMF, NMET and additional premium as per MMDR Amendment Act, 2021.

Rationale:

• T1- As no deal was heard this week, the weightage was nil for the calculation of the index.
• T2- SteelMint received eight (08) offers and indicative prices under T2 trades in this publishing window. Six (06) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here

Odisha iron ore prices:

Ex-mines prices, including Royalty, DMF & NMET
Source: SteelMint Research

NMDC slashes prices by up to INR 500/t – PSU miner NMDC has cut iron ore prices by INR 300-500/tonne (t) for Jan’22 deliveries, SteelMint learnt from sources. Fines prices have witnessed a comparatively sharper correction than lumps. After the recent cut, the miner’s fines offers have hit a one-year low. Subdued participation for the fines lot at the PSU miner’s recent auction, fall in Odisha iron ore prices on m-o-m basis and improved supplies resulted in the price cut.

Bid prices decrease at Karnataka e-auction: On 28 Dec, an auction was conducted by the merchant miner Chowgule at which 65,000 t was booked. The iron ore lump (Fe 60.03%) lot was booked at INR 4,530/t (basic, taxes extra). At its previous auction on 14 Dec, Chowgule sold Fe 59.7% lump at INR 4,760/t. 

Goa govt to go ahead with exports: The Goa government has recently approved export of iron ore dumps to the tune of 10-20 mn t lying outside mines. The state, bound for elections in less than two months, is counting on the recent amendment to the Mineral Concession Rules (MCR) which it claims allows the state, in consultation with IBM, to dispose of low-grade mineral, overburden and beneficiation waste.