Iron ore concentrate prices in Jabalpur, central India, witnessed a significant increase this week following a sharp hike in pellet prices after the govt rolled back export duties on iron ore and pellets.
SteelMint’s assessment for Fe 63% concentrate prices currently stands at around INR 3,500/tonne (t) exw, a rise of INR 600/t, w-o-w. However, trades are yet to pick up as no active deals have been reported at current offers.
“Buyers have adopted a wait-and-watch approach and are currently resisting buying material at higher offers”, mentioned Jabalpur-based sellers.
Reasons for hike in iron ore concentrate prices-
- Export duty removal: In a highly significant development late on 18 November 2022, the government rolled back the imposed hefty export duties on steel and steelmaking raw materials. Export duty on high-grade ore and pellets has been reduced to nil.
- Sharp rise in pellet prices: SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,750/t DAP, increasing sharply by INR 1,150/t compared to INR 7,600/t in the last assessment on 18 November, 2022. Raipur-based pellet producers raised their offers up to INR 8,900-9,300/t ($109-114/t) exw from INR 7,500-7,600/t ($92-93/t). Meanwhile, Godawari Power and Ispat further increased domestic pellet (Fe63.5%, +/-0.5) offers by INR 400/t ($5/t) to INR 9,300/t exw ($114/t).
- Odisha iron ore prices stable, likely to rise: SteelMint’s weekly Odisha iron ore fines (Fe 62%) index remained stable last weekend at INR 3,400/t ex-mines (including royalty, DMF and NMET). The majority of Odisha-based miners have put their offers on hold post-roll back of export duties. Market participants are expecting Odisha miners to raise offers by INR 500-700/t following the price rally in pellets.
Outlook
Iron ore concentrate prices are expected to remain supported in the near term following a rise in pellet prices. However, low buying interest at current offers could be a deciding factor.
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