India: Odisha iron ore fines index inches up by INR 50/t ($0.5/t) amid active trades

• Miners keep offers firm post OMC auction
• Mills engage in pre-monsoon restocking

Odisha’s iron ore market largely held firm this week despite volatility in downstream segments, as steelmakers continued to actively procure material following the recent Odisha Mining Corporation (OMC) auction. Market participants noted that the auction prices of both fines and lumps remained largely stable m-o-m, reflecting balanced demand-supply dynamics.

BigMint’s Odisha iron ore fines (Fe 62%) index inched up by INR 50/tonne (t) ($0.5/t) w-o-w to INR 5,300/t ($62/t) ex-mines on 19 April. Around 120,000 t of iron ore fines (Fe 62-65%) were traded in Odisha. Notably, deals for around 900,000 t of iron ore (fines and lumps) were recorded from Odisha this week amid active buying interest.

Over 2 million tonnes (mnt) of iron ore – around 1.15 mnt of fines and 0.97 mnt of lumps – were sold in the OMC auction on 19 April, with bids remaining stable against last month. Though lower-grade fines failed to fetch a response amid a weak export market.

A steelmaker stated, “Procurement was largely need-based in the OMC auction. Due to the rise in offered volumes and base prices, bids remained stable m-o-m.”

Following the OMC auction, prices of sponge iron and semi-finished steel saw marginal corrections despite the safeguard duty announcement. However, iron ore prices were firm due to sustained restocking activity and limited availability.

A prominent trader highlighted, “Miners are holding offers firm. Many of them are refraining from accepting fresh orders, as their dispatch schedules are already overbooked.”

Meanwhile, certain steelmakers booked iron ore on a need basis to prepare for monsoon-related supply disruptions, further supporting domestic demand.

A miner informed BigMint, “Inquiries have been consistent following the OMC auction, and we are expecting demand to move northward in the coming days.”

On the export front, sentiment remained subdued. Weak international demand, especially for lower-grade ores, added pressure on high-silica and alumina content material.

Factors affecting iron ore prices

• 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 ($100/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur inched down by INR 50/t ($0.5/t) w-o-w to INR 9,450/t ($111/t) exw on 18 April.
• Sponge iron prices down w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 300/t ($4/t) w-o-w to INR 26,700/t ($313/t) on 26 April. Meanwhile, steel billet (100*100 mm) offers in Rourkela dropped by INR 400/t ($5/t) w-o-w to INR 39,900/t ($467/t) today.

Rationale

• T1- Seven (7) deals of Fe62% fines were recorded in the publishing window, and three (3) were considered for price computation and given a 50% weightage for index calculation.
• T2 – BigMint received twenty-eight (28) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Eighteen (18) 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’s analysis, iron ore prices on the eastern front will remain firm as pre-monsoon restocking gains momentum in the coming days. Trade volumes are also expected to rise in the coming month.