- Pellet, iron ore prices drop
- Trades conclude at lower offers
- Buyers look for further drop in concentrate prices
Iron ore concentrates prices in Jabalpur, central India, witnessed a significant decrease this week amid drop in offers due to prevailing weak market sentiments in pellets and Odisha iron ore market, BigMint observed.
BigMint’s bi-weekly index for Fe 63% concentrate currently stands at INR 4,500-4,700/t exw ($54-56/t), a fall of INR 450/t ($5/t) exw as against the last assessment on 30 March, 2024. Notably, prices fell to over five-month lows in recent deals as these price levels were seen in end-October, 2023, data maintained with BigMint show.
“Concentrate inventories have increased as fewer trades have happened in the previous month. Few deals have been cancelled as well owing to price fluctuations. Also, buyers are asking now to continue the previous deals with current offers,” mentioned a Jabalpur-based seller.
Meanwhile, buyers are expecting further drop in prices as another seller from the region stated, “Drop in pellet offers with GPIL’s latest price cut have pushed offers down as buyers are countering the concentrate offers against falling pellet and iron ore prices.”
Rationale:
- Three (3) trades amounting to a total of 70,000 t were recorded in this publishing window and all were considered under T1 trade and were accorded with 50% weightage.
- Ten (10) offers, bid and indicative prices were reported, out of which, eight (8) were taken into consideration as T2 trades, receiving 50% weightage.
Why concentrate offers dropped significantly?
- Pellet prices drop amid offers cut: BigMint’s bi-weekly domestic pellet (Fe 63%) index inched down by INR 50/t ($1/t) to INR 9,150/t ($110/t) DAP Raipur on 2 April, 2024 compared to the last assessment on 29 March. Godawari Power and Ispat Ltd (GPIL) has reduced pellet offers for Fe 63.5% and Fe 66% (+/-0.5) by INR 300/t ($4/t) to INR 9,200/t ($110/t) and INR 10,700/t ($128/t) exw-Raipur, respectively. Other pellet makers from Raipur have also cut offers by around INR 200/t ($2/t) to INR 9,000/t ($108/t) exw.
- Odisha iron ore prices drop w-o-w: BigMint’s weekly Odisha iron ore fines (Fe 62%) index decreased by INR 200/t ($2/t) w-o-w to INR 4,550/t ($54/t) ex-mines on 30 March, 2024. Odisha iron ore prices remained under pressure in the last week of this financial year amid weak response from buyers and a downtrend in the export market. Steelmakers remained cautious about booking material this week as they are expecting a drop of around INR 300-500/t ($4-6/t) in iron ore prices in the first or second week of April as supplies will improve with miners’ ECs being restored.
Outlook
Iron ore concentrate offers are expected to remain under pressure considering bearish market sentiments prevailing in the pellet export and domestic market along with falling iron ore prices. Meanwhile, buyers’ bids have already dropped in recent deals amid price cut expectations, which are expected to weigh down concentrate prices further.