- Pellet, semis prices rangebound w-o-w
- EC limits of major miners expire for FY’25
Iron ore prices in Odisha remained largely stable this week, despite reduced trading activity. Market participants noted that demand has softened, leading to limited transactions. Additionally, miners are not actively offering material, with only selective offers available at higher prices.
BigMint’s Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 5,100/t ($56/t) ex-mines on 13 March. Around 13,000 t of iron ore fines (Fe60-62%) deals were concluded this week by the merchant miners. Overall, around 100,000 t of iron ore (fines and lumps) deals were recorded from Odisha this week.
A major trader commented, “The market is currently in a wait-and-watch mode. Some buyers are holding back as they await the upcoming Odisha Mining Corporation (OMC) auction, while others are cautious due to uncertain demand trends.”
On 20th March OMC auction is schedule for this month. However, EC limits of major miners in Odisha have expired and deals are being concluded with existing stocks.
Pellet and sponge iron prices remained rangebound, reflecting the sluggish market sentiment. A sponge iron manufacturer informed, “Raw material availability is tight, but we are not seeing aggressive buying either. Prices have remained stable as a result.”
Meanwhile, in a significant development, the Jharkhand government has approved a fourfold increase in cess on mined minerals to boost state revenue. The cess on coal per metric tonne has been raised from INR 100/t to 250/t, while iron ore has seen a hike from INR 100/t to 400/t. The decision was taken in a recent cabinet meeting chaired by Chief Minister Hemant Soren.
Market players noted that cess hike could impact production costs and overall market sentiment. A miner based in Jharkhand remarked, “This increase will raise costs for miners and steelmakers alike, potentially affecting supply and demand dynamics in the coming months.”
Factors affecting iron ore market:
Pellet offers stable w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil remained stable w-o-w at INR 8,500/t ($99/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur also range bound w-o-w at INR 9,450/t ($109/t) exw on 11 March.
Sponge iron prices fall w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 150/t ($3/t) w-o-w to INR 26,500/t ($302/t) on 13 March. Meanwhile, steel billet (100*100 mm) offers in Rourkela increased by INR 100/t ($1/t) w-o-w to INR 38,800/t ($445/t) today.
Rationale
- T1 – Two (2) 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 three (23) 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 part of the country are expected to remain rangebound. More clarity will emerge next week post OMC’s auction.
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