Indian iron ore prices stable as trade activities improve

Iron ore prices in most of the Indian markets remained stable this week. SteelMint’s weekly Odisha iron ore fines (Fe 62%) index remained largely stable at INR 3,500/t ex-mines in the recent deals concluded. However, trade activities have witnessed an increase on lower inventories and less trades seen in the past few weeks.

• T1- A couple of pellet makers booked around 60,000 tonnes of Odisha iron ore fines (Fe 62%) at INR 3,550/t ex-mines but there was no confirmation from buyer or seller. Therefore, these deals were not taken for the index calculation and given nil weightage.
• T2- SteelMint received ten (07) offers and indicative prices under T2 trade deals in this publishing window out of which six (06) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here.

Odisha iron ore prices:

Also, India’s largest miner, NMDC, today announced a rollover in prices for October supplies. NMDC fixed prices for 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 prices, excluding royalty, DMF and NMET) with effect from today.

The recent auction from Karnataka also fetched a decent response. Vedanta conducted an auction on 7 October for the sale of 48,000 t of iron ore lumps (Fe60.5-61.5%) from A. Narrain mines in Karnataka’s Chitradurga district. The entire quantity of around 48,000 t of lumps was booked at a price of around INR 4,651-4,719/t, higher by nearly INR 600/t against the previous price of INR 4,069-4,111/t. Prices exclude royalty, DMF, and NMET.

A Chandrapur-based miner sold around 200,000 t of fines (Fe 63%) at INR 3,500-3,600/t FOR Ballarshah in the last one week. Also, they have sold around 50,000 t (5-18mm, Fe 63%) at INR 8,100-8,300/t FOR Raipur.

Factors behind stability in Indian iron ore prices:

• Improved demand from pellet makers: Buying inquiries from pellet makers has seen an improvement, which is largely due to fall in iron ore stocks with them. India’s pellet production was recorded at 6.31 mnt in August 2022, an increase of 3% m-o-m and a sharp recovery from 5.67 mnt in June 2022.
• Lower bookings in recent SAIL iron ore auctions: Iron ore auction sales conducted by SAIL have seen a steep drop since Q1FY23. Sales volumes fell to 100,000 t in September. Lower sales were largely due to price disparity in bids and offers. The miner recorded sales of over 2.69 million tonnes of iron ore via regular auctions in FY22 from its captive mines in Odisha and Chhattisgarh, as per SteelMint data.
• Price support in pellets: SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,300/tonne (t) DAP Raipur, stable compared to the last assessment on 4 October, 2022.
• Tight availability of high grade ore in Odisha: Odisha’s iron ore production is slated to drop to a one-year low of 7.40 mnt in September 2022, as per SteelMint’s estimates. Such levels (7.4 mnt) were last seen in September 2021.