SteelMint: Odisha iron ore fines index stable, market waiting for OMC auctions

SteelMint’s weekly Odisha iron ore fines index (Fe 62%) remains stable w-o-w at INR 6,000/t ex-mines. Improved iron ore supply and the decline in pellets and sponge iron prices held back iron ore prices from climbing. Limited trade activities were seen in the merchant market as market participants are waiting for the OMC auction results. The auction is likely to take place next week.

Rationale:

• T1- No trade was recorded this week. Hence not considered under T1  and given 0% weightage.
• T2- SteelMint received eight (08) offers and indicative prices under T2 trades in this publishing window. All were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here

Lump prices drop – However, Odisha iron ore lumps (5-18 Fe 63% and 10-30 Fe 63%) prices have moved down sharply by around INR 850-950/t exw this week owing to weak demand and declining semi-finished steel prices.

Factors impacting iron ore prices

• Pellet prices decline further by INR 500/t w-o-w: Pellet prices in Durgapur have decreased, as per SteelMint’s assessment. The current assessment for pellets (Fe 63%) stands at INR 10,500/t exw Durgapur, down INR 500/t compared with prices a week ago. India’s pellets (Fe 63%, 3% Al) export index (FOB east coast) rose $13/t w-o-w to $165/t from $152/t on 30 Mar’22. The export market regained momentum following expectations that demand might resurface as domestic concentrate prices in China have started to climb. This may prevent further drop in Indian domestic prices.
• Sponge prices drop sharply: SteelMint’s daily sponge iron, CDRI, index is assessed at INR 37,500/t exw Rourkela on 9 April. On w-o-w basis, the index fell by INR 2,650/t.

Odisha iron ore prices:

Highlights from other states:

Karnataka iron ore e-auction by private miners receives dull response:

Private miners in Karnataka had conducted an iron ore e-auction on 5 April in which 130,000 t of material had been booked out of a total of 510,370 t.

• MSPL Limited emerged as the largest buyer at 28,000 t followed by Jairaj Ispat Limited, JSW Steel Limited Salem Works and Kalyani Steels Limited at 12,000 t each.
• The iron ore lump (Fe 58.75%) lot was booked at INR 4,320/t (basic, taxes extra).