- Bid-offer gaps emerge for higher-grade fines
- Supply shortages, monsoon may slow dispatches
Iron ore prices in Odisha, India, remained largely stable this week, with moderate trade activity from local steelmakers. While the overall market maintained a steady trend, mid-grade fines witnessed slight price relaxation, as deals were concluded at marginally lower levels. In contrast, the limited availability of high-grade fines kept their prices steady, with trades finalising at existing offers.
Additionally, the market awaits price revisions from key miners next week.
Price update
BigMint’s Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 4,800/tonne (t) ($56/t) ex-mines on 28 June. Notably, deals for around 450,000 t of iron ore (fines and lumps) were recorded by BigMint in Odisha, concluded by merchant sellers primarily to fulfil the immediate requirements of steelmakers.
Meanwhile, mid-grade fines and other lump components dropped by INR 100/t ($1/t) this week amid the trades at lower prices.
Market commentary
Market participants noted a mixed sentiment, with buyers expressing caution due to ongoing pressure in the sponge iron and semi-finished steel segments. A buyer stated, “Iron ore prices are still relatively high compared to the declining trends in the sponge iron and semi-finished markets. This has led to resistance from buyers and led to price negotiations in some trades.”
Pellet producers in the eastern region reportedly raised their prices following the recent OMC auctions, citing the need to realign their offers with increasing production costs. Meanwhile, miners started adjusting the prices of mid-grade fines in response to demand dynamics.
Some buyers wanted to procure iron ore at OMC prices, but deals are still under negotiation. Sources indicated that miners have a material shortage and dispatches are expected to slow down in the next month amid the ongoing monsoon.
A miner informed BigMint, “We are aligning our mid-grade iron ore offers as per current market requirements. However, high-grade fines remain in short supply and are being traded within the existing range. A few more price revisions are expected in the next week.”
A notable bid-offer disparity was observed, especially for higher-grade fines, leading to delays in finalising some deals as buyers sought further price relaxation.
Looking ahead, iron ore prices in the region may face volatility amid seasonal monsoon disruptions. Traders expect fluctuations in supply and demand dynamics in the coming days as rainfall intensifies across Odisha.
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 7,900/t ($91/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur rose by INR 500/t ($6/t) w-o-w to INR 8,850/t ($102/t) exw on 27 June.
Sponge iron prices down w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela inched down INR 100/t ($1/t) w-o-w at INR 23,900/t ($280/t) on 28 June. Meanwhile, steel billet (100*100 mm) offers in Rourkela were also fell by INR 100/t ($1/t) w-o-w to INR 36,400/t ($426/t) today.
Rationale
- T1- Five (5) deals for Fe62% fines were recorded in the publishing window, and three (3) were considered for price computation. These were given 50% weightage for index calculation.
- T2 – BigMint received eleven (11) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Ten (10) 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 of iron ore in Odisha are expected to remain volatile in the near term. Fluctuations may be seen in the coming days amid price revisions from merchant miners.
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