- Pellet, sponge prices recover
- Moderate demand in iron ore
- Export market under pressure
BigMint’s weekly Odisha iron ore fines (Fe 62%) index inched up by INR 50/t ($0.5/t) w-o-w to INR 4,600/t ($55) ex-mines on 6 April 2024. No deal of standard grade Fe 62% fines was recorded this week.
Odisha’s iron ore prices slightly inched up this week amid recovered pellet prices and a significant rise in the sponge and finished steel prices. However, few miners opened their offers in the market while the remaining merchant miners will offer from the next week as they recently resumed the production of financial year 2025 (FY’25) material production.
A buyer said, “Few miners offered the material at slightly high prices but no significant buying activity was witnessed in the first week of the new financial year. The market will get a clear indication of the prices in the second week as all the sellers will open the offers. The slight recovery in the raw pellet prices has boosted the market confidence but the participants are skeptical about the market may sustain in the next few days.”
As per a few participants they were expecting a price drop at the new offers, few buyers took a wait-and-watch stance as the export market is currently downtrend while the domestic market was surprisingly northward this week. The steelmaker said that the shortage of imported scrap and power cuts were the main reasons behind this price rise.
A few miners reported that they are observing the market fundamentals and will offer the material in the next few days. However, they received a few inquiries for the material from buyers this week. One miner from Odisha sold the bulk material of low-grade fines to a beneficiation plant.
Rational:
- T1- One (1) deal was recorded in this publishing window but not taken for price computation. These were given 0% weightage for index calculation.
- T2- BigMint received twenty-five (25) offers and indicative prices under T2 trade deals in this publishing window. twenty two (22) were taken into consideration and given 100% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document Click here.
Factors affecting prices-
- Pellet offers fall in domestic, export markets: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil rose by around INR 150/t ($2/t) w-o-w. The current assessment stands at INR 7,850/t ($94/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur also increased by INR 150/t ($2/t) w-o-w to INR 8,650/t ($107/t) exw on 5 April. However, BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) inched down by $1/tonne (t) to $92/t on 3 April 2024. The seaborne pellet prices have continued to decline over the past few months amid bearish market sentiments and lack of transactions. The demand for Indian raw pellets was negligible in China and other Southeast Asian countries.
- Export offers under pressure: BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index fell by $3/t w-o-w to $55.5/t FOB east coast on 4 April. No deals were heard for standard Fe 57% fines in this publishing window amid low buying interest in the seaborne market and higher offers from sellers in the current market. Discounts have widened from 22-24% last week to 25-26% this week.
- Sponge iron prices edge up in Rourkela: BigMint’s assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela rose by INR 2,000/t ($24/t)w-o-w to INR 29,200/t ($350/t) today. Meanwhile, steel billet (100*100 mm) prices in Rourkela increased by INR 2,300/t ($28/t)w-o-w to INR 41,700/t ($500/t) today.
Outlook
Iron ore prices in Odisha are expected to remain volatile in the next week after new production may come into effect.