SteelMint: Odisha iron ore fines index inches down amid limited trade

SteelMint’s weekly Odisha iron ore fines index (Fe 62%) fell marginally by INR 50/t w-o-w to INR 5,650/t ex-mines. Fall in pellet offers and weak market sentiments limited trade as buyers expect fines offers to correct further in the near term.

Also, players are looking ahead at the OMC and OMDC auctions scheduled in the short term which may give a better price clarity. However, a sharp price drop looks less likely given the arrival of monsoons next month.

Rationale:

• T1- No deal has been reported as T1 trade therefore given 0% weightage.
• T2- SteelMint received twelve (12) offers and indicative prices under T2 trade deals in this publishing window. Nine (09) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here

Factors impacting iron ore prices:

• Logistic constraints and weak demand: Rakes availability issues and high prices of ore are keeping buyers reluctant. No big deals were heard concluded so far in this week.
• Falling pellet and sponge prices w-o-w: Pellet prices in Barbil have decreased, as per SteelMint’s assessment. The current assessment for pellets (Fe 63%) stands at INR 10,000/t exw Durgapur, down by another INR 100-200/t compared with prices seen a week ago. SteelMint’s daily sponge iron, CDRI, index is assessed at INR 36,500/tonne (t) exw-Rourkela on 7 May, 2022. On w-o-w basis, the index has fallen by INR 800/t.

Odisha iron ore prices:

Highlights from other states:

• State moves to take possession of 88 iron ore leases in Goa: The Goa government, finally moving towards auction of iron ore mines, has issued notices to the erstwhile lessees giving them a month to clear their equipment and material from their leaseholds.

In response, Goa Mineral Ore Exporters Association (GMOEA), whose members include Vedanta, Sociedade de Fomento and VM Salgaocar, said it intends to move court against the state’s decision to vacate them from their old leases.

• Karnataka iron ore e-auction by private miners receives weak response

Karnataka private miners had conducted an iron ore e-auction on 30 April, 2022 in which 65,370 t of material were booked out of a total of 496,370 t.

• JSW Steel emerged as the largest buyer at 36,000 t followed by Kirloskar Ferrous Industries Limited at 24,000 t.
• The iron ore fines (Fe 65%) lot was booked at INR 5,700/t (basic, taxes extra).