India: Odisha iron ore fines index largely stable amid tight availability of material

• Pellet and semi-finished steel prices rise w-o-w
• Miners’ EC limits set to expire for FY’25

Iron ore prices in Odisha remained firm this week due to tight supply as several miners have approached their Environmental Clearance (EC) extraction limits. Additionally, some advance bookings for dispatches are yet to be cleared, further limiting availability in the market.

BigMint’s Odisha iron ore fines (Fe 62%) index increased by INR 50/t ($2/t) w-o-w to INR 5,050/t ($56/t) ex-mines on 1 March. Around 13,000 t of iron ore fines (Fe60-62%) deals were concluded this week by the merchant miners. Overall, around 500,000 t of iron ore (fines and lumps) deals were recorded from Odisha this week.

Iron ore demand remained steady as buyers were aggressive in securing material for end-March deliveries to avoid last-minute challenges before the financial year closes.

A steelmaker commented: “We are ensuring timely procurement as EC renewals in April might delay fresh supply.”

Major miners continued offering low- to mid-grade iron ore, with limited high-grade lots commanding premium prices. Miners are limiting offers for high-grade material in large volumes at this stage. Meanwhile, buyers actively sought cost-effective alternatives, including procuring from traders.

A trader commented on the current scenario: “The recent uptick in pellet prices also lent support to iron ore demand. Pellet prices have gained in recent weeks, pushing some buyers to secure iron ore at current rates before further increases.

As the financial year-end approaches and supply concerns persist, market participants anticipate firm pricing trends, with clearer direction yet to emerge in the market.

Factors affecting iron ore market:

Pellet offers up w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil remained largely stable w-o-w at INR 8,350/t ($97/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur rose by INR 150/t ($2/t) w-o-w to INR 9,450/t ($109/t) exw on 28 February.

Sponge iron prices rise w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela rose by INR 550/t ($6/t) w-o-w to INR 26,450/t ($302/t) on 1 March. Meanwhile, steel billet (100*100 mm) offers in Rourkela increased by INR 800/t ($9/t) w-o-w to INR 38,750/t ($444/t) today.

Rationale

• T1 – Three (3) deals of Fe62% fines were recorded in the publishing window, and two (2) were considered for price computation and given a 50% weightage for index calculation.
• T2 – BigMint received twenty-seven(27) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Twenty one(21) were taken into consideration and given a 50% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document, click here.

Outlook

According to BigMint analysis, iron ore prices in the eastern region may rise, with trade activity expected to maintain momentum as buyers are still in the restocking phase.