SteelMint: Odisha iron ore fines index largely stable, market awaits OMC auction

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index has remained largely stable at INR 3,450/t ex-mines.

However, buyers are still not active in placing inquiries for iron ore given the pending deliveries of previous orders. They are waiting for OMC auction which is around the corner and where buyers are expecting some reduction in the base price.

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,100/tonne (t) DAP Raipur on 9 September, down INR 200/t compared to last week’s assessment on 2 September. Falling sponge iron prices have kept buying interest on the lower side.

Rationale:

• T1- One deal of around 25,000 t of fines (Fe 62%) was heard to be concluded by a trader recently at INR 3,500/t ex-mines and was considered for the index calculation. Therefore, 50% weightage was given to it.
• T2- SteelMint received nine (09) offers and indicative prices under T2 trade deals in this publishing window out of which seven (07) were taken into consideration and given 50% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here.

Odisha iron ore prices:

Highlights from other states:

• 100,000 t of iron ore fines booked at Vedanta’s Karnataka auction: Vedanta scheduled an auction on 7 September for sale of iron ore fines from its A. Narrain mines in Karnataka’s Chitradurga district. According to market sources, the entire quantity of 100,000 t of fines (Fe57%) was booked at the base price of INR 1,277/t. Prices are exclusive of royalty, DMF and NMET.
• Sandur Mines’ iron ore auction fails to fetch response: Sandur Manganese and Iron Ore Limited had scheduled an auction on 8 September for sale of 336,000 t of iron ore (fines and lumps) from its mines in Bellary, Karnataka. The floor price for fines was INR 2,905-3,075/t and for lumps was INR 5,240-6,220/t (including royalty, DMF and NMET). According to market sources, the auction failed to receive any response.
• NMDC rolls over iron ore prices for September: India’s largest merchant iron ore mining company, NMDC, has kept iron ore prices unchanged for September 2022 deliveries, SteelMint learnt from reliable sources. NMDC fixed prices of lump iron ore (65.5%, 6-40mm) at INR 4,100/t, DR CLO (Fe 67%, 10-40mm) at INR 4,920/t and iron fines (64% – 10mm) at INR 2,910/t,  FoR, excluding royalty, DMF and NMET.
• 4,000t iron ore lumps sold in NMDC’s Chhattisgarh auction:  Around 4,000 t of iron ore lumps were booked (10-20mm, Fe 65.5%-indicative) from Bacheli mines in NMDC’s iron ore auction from Chhattisgarh on 6 September. According to market sources, the entire quantity was booked at a base price of INR 4,131/t exclusive of royalty, DMF and NMET extra. The material will be delivered on FOT (by truck) ex-mine basis.