Iron ore prices in India’s largest iron ore producing state – Odisha are facing pressure from sharp decline in pellet prices in eastern India, fall in sponge offers and plunge in global iron ore prices.
Merchant iron ore miners hiked iron ore prices up to INR 400/MT in mid of Mar’17 following which prices have remained stable.
Odisha based merchant iron ore miners have kept prices unchanged as of now however few trade sources shared that they are seen giving discounts on bulk purchases.
Factors that have put Odisha iron ore prices under pressure are:
1. Sharp decline in domestic pellet offers – Falling global prices reduced realizations in pellet exports. Indian pellet export offers are assessed in the range of USD 82-83/MT, CFR China. Less viability in exports forced pellet makers to restrict sales in domestic market. Increased pellet supply in domestic market resulted in sharp fall in domestic pellet offers. Barbil pellet offers have come down by INR 700/MT while that in Durgapur have come down by INR 600/MT M-o-M.
2. Fall in Sponge Prices – Limited trades have resulted in fall in sponge prices. C-DRI prices in eastern India have reduced up to INR 1,900/MT in last one month and P-DRI prices have come down by around INR 2,000/MT on monthly premises.
3. Plunge in global iron ore prices – Spot iron ore prices in China have dropped amid decline in iron ore futures. Fe 62% fines index today dropped below USD 60/MT level and closed at USD 59.5/MT, CFR China. In last two days, index has fallen by USD 7-8/MT.
Looking at above mentioned factors, it seems that Odisha iron ore prices may shortly undergo a downward revision.
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