India: Iron ore prices in Odisha fall by INR 250/t ($3/t) w-o-w as bids drop in OMC auction

• Around 2 mnt of iron ore receive bids in OMC’s auction
• Other merchant offers yet to be revised for new sales

Iron ore prices in Odisha witnessed a decline of around INR 100–300/t this week, following subdued market sentiments and reduced bids in the Odisha Mining Corporation’s (OMC) June 2025 auction. The price downturn is largely attributed to a sharp fall in the prices of pellets, sponge iron, and other steel intermediaries, which pushed buyers to quote significantly lower than last month’s levels.

Price update 

BigMint’s Odisha iron ore fines (Fe 62%) index dropped by INR 250/t ($3/t) w-o-w at INR 4,800/t ($55/t) ex-mines on 21 June. Notably, deals for around 515,000 t of iron ore (fines and lumps) were recorded by BigMint in Odisha, concluded by other merchant sellers, which were concluded to fulfil the immediate requirements of steelmakers.

Other grades of iron ore fines and lumps also showed a downtrend of INR 50-200/t ($0.5-2.5/t) in Odisha. Pre-monsoon restocking led to increased demand, but prices dropped due to weak sponge and steel tags.

Market commentary

OMC conducted an auction for 2.05 mnt of iron ore (0.98 mnt of lumps and 1.07 mnt of fines) on 19 June out of which 2 mnt was booked by buyers. Around 1.025 mnt fines (95%) and 0.976/t lumps (almost 100%) received bids of INR 3,600-5,600/t and  INR 5,150-7,500/t, respectively. Bids fell by INR 250/t for fines and INR 350/t for lumps compared to the May auction.

The miner had reduced base prices by INR 500-700/t ($6-8/t) and INR 500/t ($6/t) m-o-m for fines and lumps, respectively. The sharp decline in pellet and sponge iron prices in central and eastern India led to a drop in OMC’s base prices.

Market participants highlighted that the weakening steel segment has been a key trigger. A trader informed: “Sponge iron and pellet prices were dropping sharply, so buyers were reluctant to place aggressive bids. The correction in the OMC auction was on expected lines.”

Although most merchant miners are yet to officially revise their offers, sources suggest that price adjustments could be on the horizon. A few miners already reduced their offers shortly after the OMC auction results, indicating a possible downward revision trend across the region.

Despite the declining price trend, OMC’s auction received good response as buyers rushed to secure inventory ahead of the monsoon season, when logistical challenges typically intensify. A market participant mentioned, “Demand was mostly need-based, but buyers are more optimistic now with prices coming down.”

A steelmaker said on current market dynamics, “The poor steel market is still a concern. Even if iron ore prices drop, unless there is a recovery in finished steel, the revival in demand will be limited.”

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 to INR 7,900/t ($91/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur remained stable w-o-w at INR 8,500/t ($98/t) exw on 20 June.

Sponge iron prices drop w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 100/t ($1/t) w-o-w to INR 24,000/t ($277/t) on 21 June. Meanwhile, steel billet (100*100 mm) offers in Rourkela dropped by INR 750/t ($9/t) w-o-w to INR 36,500/t ($422/t) today.

Rationale

• T1- Six (6) deals for Fe62% fines were recorded in the publishing window and one (1) considered for price computation. These were given 50% weightage for index calculation.
• T2 – BigMint received twenty-one (21) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Nineteen (19) were taken into consideration and given 50% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document, click here.

Outlook

According to BigMint’s analysis, prices for iron ore in Odisha are expected to become clearer next week, as other merchant sellers will float fresh offers. Demand is anticipated to remain volatile due to ongoing pressure on steel prices and sales.