India: Iron ore concentrate prices inch up on demand-supply imbalance

• Sellers prioritising dispatches of earlier commitments
• Recent uptick in pellet, steel prices to support iron ore prices

BigMint’s latest bi-weekly assessment for India’s Fe 62% iron ore concentrate stood at INR 5,000/tonne (t) ($56/t) ex-works Jabalpur, inching up by INR 50/t ($0.5/t) as of 31 December, compared with 27 December. Meanwhile, market sentiment strengthened w-o-w, underpinned by elevated seller offers and steady trade activity at prevailing price levels, reflecting improved confidence among participants.

Meanwhile, Fe 63% iron ore concentrate prices were stable at INR 5,050-5,150/t ($56-57/t) ex-works, strongly supported by an acute shortage of high-grade material across the region. Regular trades at these levels clearly indicate broad market acceptance of current prices. However, several sellers have refrained from revising offers, as they remain focused on dispatching previously booked material; fresh price indications are expected only after these inventories are cleared.

A Jabalpur-based seller said, “Offer revisions would be considered only after the completion of earlier commitments. The seller added that the entry of new market participants has further widened the demand-supply gap, creating a distinctly bullish price sentiment. With overall market activity gaining traction, prices are expected to trend higher in the near term.”

Echoing similar optimism, another seller told BigMint: “The recent uptick in pellet prices and finished steel prices is reinforcing a positive outlook for the coming days.”

Meanwhile, market participants are keenly awaiting NMDC’s upcoming iron ore price revision, which is expected to provide a clearer directional cue and potentially set the tone for broader market movements.

Rationale

• One (1) trade was recorded in this publishing window and was taken into consideration, receiving a 50% weightage.
• Ten (10) offers and indicative prices were heard, and eight (8) were taken into consideration as T2 trades, receiving 50% weightage.

Factors supporting prices

• Odisha iron ore prices edge up w-o-w: BigMint’s Odisha iron ore fines (Fe 62%) index increased by INR 50/t ($0.5/t) w-o-w to INR 5,750/t ($64/t) ex-mines as of Saturday, supported by active buying interest from steelmakers. Strong demand for fines continued to underpin prices, keeping market sentiment firm. Meanwhile, demand for iron ore fines strengthened further after the recent OMC auction, prompting miners to maintain firm offers in the spot market.
• Pellet prices increase by INR 100/t ($1/t) in Raipur: PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, increased by INR 100/t ($1/t) to INR 9,600/t ($107/t) DAP on Tuesday, compared with the previous assessment on 26 December. In line with this, Raipur-based pellet producers raised offers for Fe 62.5% (+/-0.5) pellets by INR 100/t ($1/t) to INR 9,400–9,500/t ($105–106/t) ex-works. Producers such as Godawari maintained offers at INR 9,500/t ($105/t) for Fe 62.5% pellets. The upward revision in pellet prices was largely driven by a sudden surge in sponge iron and semi-finished steel offers, which improved market sentiment and supported higher realizations.

Outlook

Iron ore concentrate prices are expected to remain firm in the near term, supported by a sustained demand-supply imbalance and limited availability of high-grade material. Seller focus on dispatching earlier commitments is likely to restrict fresh offer revisions, keeping downside risks limited. Strengthening pellet and finished steel prices may further lend support to market sentiment. However, NMDC’s upcoming price revision will be key in determining market direction.