SteelMint: Odisha iron ore fines index rises to over 8-month high

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index rose by INR 250/t to INR 5,250/tonne (t) ex-mines (including royalty, DMF and NMET). The index rose to over an eight-month high. These levels were last seen in mid-May 2022.

The hike in prices by the miners post-OMC’s auction amid availability of high-grade ore led to the index for fines rising. However, trades have remained subdued this week.

Rationale:

• T1- No deal was reported in fines (Fe 62%) and therefore not taken into consideration for the index calculation and given 0% weightage.
• T2- SteelMint has included ten (10) offers and indicative prices under T2 trade deals in this publishing window. Out of this, seven (7) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here

Factors driving up fines index:

• Lack of high grade material: Availability of high-grade iron ore in Odisha is a big concern. Therefore, miners hiked their offers post-OMC’s auction and received a positive response from the buyers too.
• Pellet trades in eastern India fall marginally: SteelMint’s bi-weekly pellets (Fe 63%) assessment stood at INR 9,500-9,600/tonne (t), loaded to wagon in Barbil. Prices have fallen by INR 200/t w-o-w, amid limited trades and fall in enquiries.

India iron ore prices:

• NMDC Chhattisgarh hikes iron ore prices by up to INR 500/t ($6/t): India’s largest merchant iron ore mining company, NMDC, increased list prices of iron ore recently, SteelMint learnt from reliable sources. The company raised prices of lump ores by up to INR 300/t and fines by INR 500/t, effective from 28 January. NMDC fixed prices for lump iron ore (65.5%) at INR 4,800/t, DR CLO (Fe 67%, 10-40mm) at INR 5,820/t and iron fines (64% – 10mm) at INR 3,910/t (FoR prices) from its Bacheli complex, excluding royalty, DMF and NMET.
• Karnataka e-auctions receive subdued response: BKG Mining conducted an auction for the sale of 52,000 t of iron ore from its Haddinapade mines, Karnataka, on 24 January. Out of this, 12,000 t of lumps (10-40mm, Fe63-63.3%) were booked at the floor price of INR 3,325-3,365/t which exclude royalty, DMF, and NMET. Meanwhile, Vedanta conducted an auction for 28,000 t of iron ore lumps (Fe57.5%, 6-20 mm) from its A. Narrain mines in Karnataka on 24 January. According to sources, the entire quantity was booked at INR 4,126/t. The floor price was set at INR 3,696/t (excluding royalty, DMF, and NMET).