- OMC raises base prices for auction next week
- Sponge iron and steel prices rise sharply w-o-w
Odisha iron ore prices witnessed an increase of INR 100-200/t during the week ended 17 January, supported by a hike in the Odisha Mining Corporation’s (OMC) base prices and improving sentiments in the downstream steel market over the last three to four days, according to market participants.
Price update
BigMint’s Odisha iron ore fines (Fe 62%) index increased by INR 100/t ($1/t) w-o-w at INR 5,900/t ($64/t) ex-mines on Saturday. BigMint recorded deals for around 525,000 t this week, concluded directly by steelmakers. The major trades were concluded in the iron ore fines segment.
OMC will auction 3.6 mnt of iron ore (1.414-mnt lumps and 2.2-mnt fines) on 19 January. The miner has increased the base prices of lumps by around INR 800/t ($9/t), while those of fines rose by INR 150-350/t ($2-4/t) m-o-m. The recent increase in pellet, sponge iron and steel prices have prompted miner to lift iron ore offers.
Market highlights
Market sources indicated that iron ore demand remained firm in recent days, driven by regular inquiries from buyers. A trader said, “Buying interest has improved notably as steel prices showed strength, which encouraged mills to secure raw material.”
Participants noted that the upcoming OMC auction, scheduled for 19 January, is expected to provide clearer direction on near-term pricing trends. Major steelmakers are likely to participate actively and purchase bulk volumes to secure material for the final quarter of the current financial year.
A steel producer said, “The auction will be a key indicator for the market. Mills are planning aggressive buying as they want to lock in volumes for Q4FY26.”
Ahead of the auction, some miners have withdrawn their current offers and are expected to revise prices after the auction outcome. A miner commented, “A few miners have revoked offers as they anticipate better realisations post-auction, especially if bids move up compared to last month.”
Market participants further informed that auction bids are likely to rise month-on-month, supported by improved steel market fundamentals and restocking activity. However, some buyers have already booked need-based quantities from private miners to avoid supply tightness or price volatility around the auction.
“If auction premiums increase, spot prices (offers from other private miners) in the market may also move up,” a trader said, adding that overall sentiment remains positive in the short term, backed by steady demand and expectations of higher procurement by steel producers.
Factors affecting iron ore prices
Pellet prices up w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil increased by INR 150/t ($2/t) w-o-w at INR 8,850/t ($98/t) loaded to wagon on 16 January. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur rose by INR 250/t ($2/t) to INR 9,900/t ($109/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 1,000/t ($11/t) w-o-w to INR 26,000/t ($287/t) on 17 January.
Billet prices surge w-o-w: Meanwhile, steel billet (100*100 mm) prices in Rourkela climbed by INR 1,550/t ($17/t) w-o-w to INR 40,450/t ($446/t) on 17 January.
Rationale
- T1- Three (3) deals for Fe 62% 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 twenty-two (22) 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
Iron ore prices are expected to remain supportive in the coming week, with a possibility of further hikes in miners’ offers after the OMC auction.
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