- Around 400,000 t of deals concluded by merchant miners
- Steelmakers’ pre-monsoon restocking continues
- Iron ore lump offers rise by INR 100-400/t w-ow
BigMint’s weekly Odisha iron ore fines (Fe62%) index increased by INR 100/t ($1/t) w-o-w to INR 5,500/t ($66/t) ex-mines on 1 June, 2024. Prices remained supported as major merchant miners kept their offers on the higher side. Some trading activities were seen in the market as buyers booked on the basis of immediate requirements from miners in Odisha post OMC’s auction. Around 20,000 t of Fe62% fines deals were recorded in this publishing window.
Around 400,000 t of iron ore deals were recorded by BigMint for both fines and lumps. Iron ore prices in Odisha remained supported after OMC’s auction and the sponge and finished steel markets showed fluctuations. However, decent trading activity was witnessed in the market even at higher offers.
A steelmaker from Odisha said that the iron ore market in the eastern region is showing an uptick after OMC’s auction and NMDC’s price hike for June delivery. Buyers’ booking appetite seems to have whetted as most of the steel mills have purchased enough material in OMC’s auction. However, due to pre-monsoon restocking, there is little chance of a price drop in the next two to three weeks. A few market participants also indicated that margins of iron ore lump-grade sponge iron are much better than pellet-based DRI.
Another steelmaker said, “Market activity is expected to slow down over the next week as participants wait for election results. However, immediate material delivery are at higher prices and so buyers have limited choice but to purchase at higher offers”.
A few miners have already sold enough material for the next two months and currently accepting bids only for late delivery. The trend for the past few years has been that prices in June remain firm due to pre-monsoon restocking demand.
Rationale:
- T1- One 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- seven (27) offers and indicative prices under T2 trade deals in this publishing window. Eighteen (18) were taken into consideration and given 100% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document Click here
Market highlights:
- Pellet offers rise w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil increased by INR 250/t w-o-w. The current assessment stands at INR 9,450/t ($110/t) loaded to wagon. However, pellet (Fe 62.5%, 6-20 mm) prices in Durgapur decreased by INR 150/t ($2/t) w-o-w to INR 9,950/t ($121/t) exw on 31 May. Meanwhile, BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained stable w-o-w at $109/t on 29 May.
- Fines export offers drop w-o-w: BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index fell by $2/t w-o-w to $66.5/tonne (t) FOB east coast on 30 May 2024. Around 55,000 t of standard grade Fe 57% fines cargo was concluded at $81-82/t CFR China by an Indian miner in this publishing window but it was not confirmed at the time of publishing this article. A major miner in Odisha has also concluded 4-5 cargoes (around 275,000 t) of Fe 54% fines at around $69/t CFR China a few days back.
- Sponge iron prices rise in Rourkela: BigMint’s assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela inched up INR 300/t ($4/t) w-o-w to INR 30,300/t ($363/t) on 1 June. Meanwhile, steel billet (100*100 mm) prices in Rourkela rose by INR 200/t ($2.5/t) w-o-w to INR 43,500/t ($520/t) today.
Outlook
Iron ore offers in Odisha are expected to remain supportive in the coming weeks for pre-monsoon restocking. However, buying activity is expected to gather momentum post-election results next week.