- Recent auctions by SAIL, ESL receive no active response
- Odisha miners hold back iron ore offers
- NMDC slashes iron ore offers by up to INR 750/t
- Mills defer iron ore bookings on growing price uncertainty
SteelMint’s weekly Odisha iron ore fines index (Fe 62%) fell sharply by INR 800/t w-o-w to INR 4,000/t ex-mines. In an indication of the sharp fall in the domestic steel raw materials market after the recent export duty revision, many buyers who had booked iron ore from different miners have slowed down lifting of material, SteelMint learnt from sources.
Rationale:
- T1- No confirmed deals were heard.
- T2- SteelMint received ten (10) offers and indicative prices under T2 trade deals in this publishing window out of which eight (08) were taken into consideration and were given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here.
Four iron ore auctions were scheduled this week in total by SAIL and ESL. With buyers holding back, the auctions did not receive response. Odisha-based key merchant miners are holding back offers and haven’t revised offers yet, but with the steep drop in pellet and sponge prices, miners are likely to lower offers next week.
Drop in pellet and sponge prices have weighed down iron ore prices. SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,750/tonne (t) DAP Raipur on 27 May 2022, down by around INR 250/t compared to the last assessment on 24 May. With the decline in sponge iron and steel prices, pellet buying activity remained limited. India’s pellet export market has turned silent after the announcement of the steep export duty.
The Indian government has recently imposed a steep 45% export duty on iron ore pellets from nil previously. With exports turning unviable at current price levels, merchant pellet players are actively exploring the domestic market.
Additional supplies from Lloyds
Lloyd Metals and Energy Limited (LMEL), a leading iron and steel company, recently obtained clearance to dispatch mined iron ore out of Maharashtra. Lloyds Metals is operating an iron ore mine, spread over an area of 348.09 hectare in Surjagarh village in Gadchiroli district, Maharashtra. The mine has estimated reserves of 90 million tonnes (mnt). Amidst active buying inquiries, deals of 100,000 t fines (Fe 63%) were recorded at INR 4,250-4,500/t FOR Chandrapur, as per SteelMint.
NMDC’s iron ore prices at four-month low
India’s largest iron ore miner NMDC has cut prices by up to INR 750/t, sources confirmed to SteelMint. Fines prices have come down by INR 750/t and that of DR-CLO by INR 720/t. Prices have fallen to around four-month lows.
Outlook
Indian iron ore prices are likely to witness a correction in the coming week on the back of expected drop in pellet prices and lower bids.
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