Iron ore concentrate prices in the Jabalpur region fell by around INR 250/tonne (t) on a weekly basis. SteelMint’s assessment for Fe 63% concentrate prices stood at around INR 6,000/t exw. However, some deals of around 10,000 t were heard this week for buyers based in western India.
Factors weighing down iron ore concentrate prices:
- Falling pellet prices: Domestic pellet prices were down sharply across regions on decreasing sponge iron prices and demand for pellets. Gaps between offers and bids are still prevailing and the key reason for the slow market. SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 11,700/t DAP Raipur on 12 April 2022, down around INR 900/t compared with the last assessment on 8 April. Prices have hit a three-month low, as per data maintained with SteelMint.
- Iron ore prices remain supported: 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 participants are waiting for the OMC auction results.State-run Odisha Mining Corporation (OMC) has scheduled an auction for iron ore fines and lump on 18 April, 2022. Around 666,000 t of iron ore lump and 950,000 t of fines will be put up for auction from OMC’s mines. The miner has decreased the base price for fines by up to INR 350/t and that for lump by up to INR 575/t as against the last auction on 15 March.
Outlook
In view of the increasing demand for iron ore concentrates in the last few years, several plants, including Pacific Iron, Geomin, and Jakhodia Minerals, are planning to expand their existing capacity. Some Greenfield projects are also in the pipeline. Iron ore concentrate prices are likely to soften due to pressure on pellet prices.
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