- Active trading activity this week with bulk orders
- Miners revised fresh offers post OMC auction
Iron ore prices in Odisha remained largely firm this week on 27 December, supported by active demand for fines from steelmakers, while lump prices witnessed a marginal correction amid weakening margins in the sponge iron (DRI) segment.
Price update
BigMint’s Odisha iron ore fines (Fe 62%) index rises by INR 50/t ($0.5/t) w-o-w to INR 5,750/t ($64/t) ex-mines on Saturday. BigMint recorded deals for around 800,000 t of iron ore this week, concluded directly by steelmakers.
Meanwhile, auctions conducted by SAIL and JSW Steel received a strong response, with around one lakh tonnes of material reportedly sold. Buyers attributed the active participation to limited availability in the spot market.
Market highlights
According to trade sources, demand for iron ore fines has strengthened post the recent OMC auction, prompting miners to maintain firm offers.
A trader informed, “After the OMC auction, buying interest in fines has improved significantly. Most miners have increased their fines prices by around INR 100/t this week and are not keen on offering discounts.”
In contrast, demand for lumps moderated slightly as sponge iron prices softened, impacting margins for DRI producers. As a result, miners reduced offers for higher-grade lumps by nearly INR 100/t to stimulate buying.
A buyer mentioned, “Lump demand has cooled compared to fines. Sponge iron margins are under pressure, so miners had to slightly adjust lump prices.”
Another source commented, “Demand is robust, but availability is tight. Some miners are already overbooked, and deliveries are getting delayed.”
Market participants also reported that some bookings were concluded at higher prices for immediate delivery, reflecting urgency among buyers. Pellet producers stated that the strong OMC auction outcome encouraged private miners to revise their offers upward, with sales now being concluded on a selective basis.
A pellet producer said, “Following the OMC results, private miners revised prices and are choosing orders carefully. However, pellet prices didn’t see much gain. Additionally, a few bulk bookings were heard at OMC auction price levels for January deliveries, indicating confidence in near-term demand.”
Factors affecting iron ore prices
Pellet prices fall 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 ($95/t) loaded to wagon on 5 December. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur fell by INR 50/t ($1/t) to INR 9,500/t ($106/t) exw.
Sponge iron prices rise w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela increased by INR 350/t ($4/t) w-o-w to INR 24,300/t ($271/t) on 27 December.
Billet prices up w-o-w: Meanwhile, steel billet (100*100 mm) prices in Rourkela increased by INR 550/t ($6/t) w-o-w to INR 37,050/t ($413/t) on 27 December.
Rationale
- T1- Seven (7) deals for Fe 62% fines were recorded in the publishing window, and five (5) were considered for price computation. These were given 50% weightage for index calculation.
- T2 – BigMint received twenty-four (24) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Eighteen (18) were taken into consideration and given 50% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document, click here.
Outlook
Iron ore prices to remain stable at current levels, while the market awaits a recovery in finished steel prices to support further bookings. A trader said, “Prices should stay steady for now, though some aggressive deals may emerge around the New Year.”
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