India: Odisha Based Merchant Miners Cut Iron Ore Price Up to INR 300/MT (USD 5)

Sharp decline in iron pellet and sponge prices and tumbling global iron ore prices have resulted in decline in Odisha iron ore prices.

Odisha is India’s largest iron ore producing state and occupies share of around 50% in India’s iron ore production. In FY17, Odisha’s iron ore (fines, lump & concentrate) production surged 24% Y-o-Y to 94.2 MnT.

Iron ore prices in Odisha have been witnessing pressure amid following factors:

1. Tumbling domestic pellet offers – Falling global prices reduced realizations in pellet exports. 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. Sharp decline in Sponge Prices – Limited trades have resulted in fall in sponge prices. C-DRI prices in eastern India have reduced up to INR 2,500/MT in last one month and P-DRI prices have come down by around INR 2,900/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 on 05th May dropped below USD 60/MT level and closed at USD 59.5/MT, CFR China.

Odisha based two major merchant miners – Rungta Mines & Essel Mining have recently reduced iron ore prices. Lump prices have come down by INR 300/MT and fines up to INR 150/MT. It is to be noted that Rungta Mines is Odisha’s largest merchant iron ore producer and recorded output of 22.88 MnT in FY17.

Ex-mines prices in INR/MT & incld Royalty, DMF & NMET
*loaded to wagons
Source: SteelMint Research