India: Odisha iron ore fines index edges down; global price drop lifts import inquiries

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index decreased to INR 3,600/t ex-mines (including royalty, DMF & NMET). The market has remained subdued with fewer trades  heard. A few Odisha-based merchant miners lifted offers after active response seen in OMC’s auction conducted last week. However, no firm trade was reported at an increased offer this week. On the other hand, a steep drop in global prices has resulted in mills raising inquiries for imported cargo.

Rationale:

• T1- No deal was reported this week therefore not taken into consideration for the index calculation and given 0% weightage.
• T2- SteelMint received eleven (11) offers and indicative prices under T2 trade deals in this publishing window out of which nine (09) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here.

Reasons behind the drop in index-

• Limited deals concluded in eastern India: Pellet prices in eastern India markets like Barbil and Durgapur remained largely stable this week amidst fewer trade activities reported due to the festive season. Also, buyers are reluctant to buy at higher prices.
• Increase in imported fines inquiries amidst global price drop: Global iron ore fines prices have fallen to over a two-year low on a weak steel demand outlook. Price indication for fines (Fe 62.5%) from Brazil fell by around $10-12/t w-o-w to $84/t, CFR China. A leading coast-based steel mill was heard to have raised inquiries for imported cargoes.

Offers from Chandrapur remain competitive – Chandrapur, Maharashtra-based iron ore miner has offered iron ore lumps (5-18mm, Fe 63%) at INR 7,700-7,800/t FOR Raipur and fines (Fe 63%) at around INR 3,600/t FOR Ballarshah. Recently, the miner has concluded deals of around 500,000 t of fines at INR 3,500/t for November dispatches.

20,000 t of iron ore lumps booked at Vedanta’s Karnataka auction – Vedanta conducted an auction on 28 Oct’22 for the sale of 20,000 t of iron ore lumps (10-40mm, Fe58-60%) from A. Narrain mines in Karnataka’s Chitradurga district. According to market sources, the entire quantity of 20,000 t of lumps was booked at around INR 4,560/t against the base price of INR 4,000/t. Prices exclude royalty, DMF, and NMET.

Outlook: Market participants are awaiting NMDC’s price revision for November deliveries which may be announced in a week’s time.