- Bid-offer imbalance limits market activity
- Higher-grade material sees moderate demand
Iron ore concentrate prices in Jabalpur edged down marginally during the assessment period amid softer bidding trends observed in the latest Odisha Mining Corporation (OMC) auction and weak markets sentiments.
According to BigMint’s latest bi-weekly assessment, Fe 62% concentrate prices were assessed at INR 5,200/t ($54/t) ex-works, down by INR 50/t ($0.5/t), while Fe 63% concentrate was heard at around INR 5,400/t ($56/t). Market activity remained moderate, with nearly 30,000 t of higher-grade concentrate traded within the prevailing price range.
The Jabalpur market displayed relative resilience compared to the broader eastern India iron ore segment, where sentiments continued to weaken amid declining pellet and Odisha ore prices. While a few suppliers marginally reduced their offers to stimulate buying interest, most sellers maintained stable quotations, supported by elevated operating costs and limited scope for aggressive price cuts.
However, trading momentum remained restricted due to a persistent gap between buyer expectations and seller realisations. Buyers continued to seek lower procurement prices, anticipating further corrections following weaker OMC auction outcomes and subdued pellet market sentiment. On the other hand, sellers refrained from offering deeper discounts, citing rising production expenses and already compressed margins. This mismatch in price expectations limited fresh trade activity during the assessment window.
Commenting on the market scenario, a Jabalpur-based seller told BigMint: “Higher diesel costs and tight fuel availability have increased by 10% mining expenses in the region.” He added that with the monsoon season approaching, mining operations are entering their final active phase, further tightening supply-side dynamics.
Rationale
- One (1) trade was recorded in this publishing window and is not taken into consideration, receiving a 0% weightage.
- Thirteen (13) offers and indicative prices were heard, and eleven (11) were taken into consideration as T2 trades, receiving 100% weightage.
Factors likely to influence prices
- PELLEX declines by INR 250/t ($2.5/t) w-o-w: PELLEX, BigMint’s bi-weekly domestic pellet (Fe 63%) index for Raipur, declined by INR 250/t to INR 9,550/t ($100/t) DAP on 26 May compared with 19 May. Although some improvement was observed in sponge iron and billet prices over the past few days, pellet buyers largely remained cautious following the steep correction witnessed in recent weeks.
- Odisha iron ore prices fall by INR 400/t ($4/t): BigMint’s Odisha iron ore fines (Fe 62%) index fell by INR 400/t w-o-w to INR 5,100/t ($53/t) ex-mines on Saturday, 23 May. The decline followed weaker-than-expected bids in OMC’s latest auction, reflecting subdued market confidence amid continued pressure on pellet, sponge iron, and semi-finished steel prices across the eastern region.
Outlook
Iron ore concentrate prices in Jabalpur are expected to remain under pressure in the near term amid weak pellet market sentiment and softer Odisha iron ore prices following lower OMC auction bids. Cautious buying activity and expectations of further correction are likely to keep trade volumes moderate. However, elevated production costs, diesel-related supply constraints, and restocking before monsoon approach keep seller resistance to price cuts may support decline in prices.
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