- Pending deliveries of previous orders keep offers firm
- Bids drop in recent deals
- Market awaits NMDC price revision
Iron ore concentrate prices in Jabalpur, central India, remained range-bound this week. Sellers completing their pending deliveries have kept offers supported. However, bids witnessed a drop in recently concluded deal. In addition, falling pellet and Odisha iron ore prices are expected to put slight pressure on concentrate prices, BigMint notes.
BigMint’s bi-weekly index for Fe 63% concentrate currently stands at INR 5,650/t exw ($68/t) exw, a marginal drop of INR 50/t ($1/t) as against the last assessment on 2 February.
“Buyers are now asking for a price drop and enquiring at comparatively lower levels. However, we have kept offers unchanged due to previous orders at current levels,” a Jabalpur-based seller said.
On the other hand, a Maharashtra-based buyer told BigMint, “We are not lifting material currently as we are expecting a price drop of around INR 400-500/t. If prices fall to the expected levels, we will resume purchases.”
Moreover, the market is eagerly waiting for NMDC’s price revision for March deliveries – which is around the corner – for better price clarity. “We have not done any deal this week as we are waiting for NMDC’s iron ore price revision with the expectation of a price cut or roll over.”
Rationale:
- Two (2) trades of Fe 63% grade and one deal of Fe 62% grade (after price normalization) were recorded in this publishing window and were accorded with 50% weightage.
- Nine (9) offers and indicative prices were reported, out of which, eight (8) were taken into consideration as T2 trades, receiving 50% weightage.
Factors pressuring concentrate prices
- PELLEX falls to 6-month low: BigMint’s bi-weekly domestic pellet (Fe 63%) index decreased by INR 150/t ($2/t) to INR 9,150/t ($110/t) DAP Raipur on 5 March compared to the last assessment on 1 March. The PELLEX index was recorded an over six-month low. Subdued export offers created pressure followed by a decline in domestic demand forcing Raipur pellet makers to cut offers. Godawari Power and Ispat Ltd (GPIL) decreased its pellet (Fe 63.5%, +/-0.5) offers by INR 200/t ($2/t) to INR 9,200-9,300/t ($111-112/t) exw-Raipur on 5 March, 2024. Other major pellet makers from Raipur also reduced their offers by INR 200/t ($2/t) to INR 8,900-9,000/t ($107-109/t) exw.
- Odisha iron ore prices fall 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 5,250/t ($63) ex-mines on 2 March, 2024. Iron ore prices in Odisha remained under pressure following the decrease in pellet offers amid soft demand. Meanwhile, subdued demand in the export market weighed on domestic iron ore prices as well. Miners offered lower-grade material with slightly lower offers in order to liquidate stocks.
Outlook
Iron ore concentrate offers are expected to remain under pressure considering bearish market sentiments prevailing in the pellet and Odisha iron ore markets. Meanwhile, bids by buyers have dropped amid price cut expectations, which is expected to weigh down concentrate prices further.