Indian Iron ore importers prefer to wait over rising Iron ore prices and depreciating Indian Rupee.
Global Iron ore prices, which strengthened by about USD 10/MT in last couple of weeks and Indian Rupee which depreciated about 1.5%, have made Indian Iron ore importers cautious in making fresh purchases. Spot Iron ore prices in China, who is the largest buyer of seaborne Iron ore, have gone up to USD 59-60/MT, CIF China for Fe 62% fines, which was about USD 47/MT in the month of April.
Indian steel makers are seen preferring domestic material over the imported ones owing to cost effectiveness.
“Spot Iron ore prices have touched USD 59/MT levels, making imports costlier. Thus, Gujarat based steel mills who were seen preferring South African lump owing to cost-effectiveness, are now making their way to domestic market. We have also raised our offers in line with increasing global Iron ore prices. Buying has also improved in last couple of weeks.”- shared a Gujarat based market participant
Pellet makers in western India, who were hit hard by cheaper imports have got some relief with increasing global Iron ore prices.
Earlier, Pellet prices for Fe 63% had fallen to INR 5,200-5,300/MT have now increased by INR 300-400/MT. Currently the prices are INR 4,800/MT ex-plant & INR 5,600/MT (delivered Kandla).
On the other hand, South African lump, which is popular in Indian market have gained USD 12/MT in last one month. Prices of South African lump (Fe 64%) are currently at USD 75/MT, CNF Kandla for June deliveries.
Mines resumption soon in Odisha
Talking about eastern India, Odisha government agreed to renew the lease periods of the 29 mines as per MMDR Amendment Act. 10 miners have already signed supplementary lease deed and are expected to resume operations soon. Market participants expect Iron ore prices will feel pressure in domestic market over increased supply.
Thus, it seems that setback Iron ore availability in domestic market might get resolved in the short run. As a result of which Iron ore imports to India might slow down.
Iron Ore Prices
|
State |
Miner | Size | Grade (Fe%) | Price | W-o-W |
M-o-M |
| Odisha# | Rungta | 5-18 mm | 63 | 5,550 | 0 | 0 |
| Odisha# | Rungta | 10-30 mm | 63 | 4,900 | 0 | 0 |
| Odisha# | Rungta | Fines | 63 | 2,400 | 0 | 0 |
| Odisha# | Serajuddin | 5-18 mm | 63 | 4,850 | 0 | 0 |
| Odisha# | Serajuddin | Fines | 63 | 2,250 | 0 | 0 |
| Chhattisgarh | NMDC | 6-40 mm | 65 | 3,050 | 0 | -200 |
| Chhattisgarh | NMDC | Fines | 64 | 1,960 | 0 | -500 |
| K’ntka E-auction | NMDC | 10-30 mm | 62.5 | 2,700** | – | – |
| K’ntka E-auction | NMDC | Fines | 60.5 | 1,560** | – | – |
* 15% royalty extra
** 15% royalty + 12 % Forest Development Tax (FDT) extra
# Prices loaded to wagons
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