India: Iron ore concentrate prices stable, may fall on bearish market sentiments

• NMDC cuts iron ore prices for August deliveries
• Dispatches an issue amid monsoon rains
• Trades have slowed down amid monsoon

Iron ore concentrate prices in Jabalpur continued to remain under pressure for yet another week. Limited trade activities, heavy monsoon rains in the region, weak pellet and iron ore market sentiments along with bid-offer disparities weighed on prices. Meanwhile, few sellers were out of the market considering the current scenario as one of the seller said, “We are not offering contemplating the current market scenario.”

BigMint’s weekly iron ore concentrate index stood at INR 4,000-4,100/t ($48-49/t) exw, stable against the last assessment on 3 August. However, buyers’ bids were heard at lower levels of INR 3,900/t ($46/t) exw. However, deals at such lower price levels are still awaited.

“We are getting enquiries however, at lower offers. Trades have also decreased amid monsoon,” a Jabalpur-based seller said.

Another seller from the region said, “Pellet players are asking concentrate at much lower offers amid weak market which are not at all feasible.”

Rationale:

• One (1) trade of 20,000 t was recorded in this publishing window, and was accorded 50% weightage.
• Nine (9) offers and indicative prices were reported, out of which eight (8) were taken into consideration as T2 trades, receiving a 50% weightage.

Why concentrate prices are under pressure?

• NMDC cuts iron ore prices for Aug’24 dispatches: NMDC decreased list prices of iron ore calibrated lump ore (CLO) and fines by INR 600/t ($7/t) and INR 500/t ($6/t), respectively, BigMint learnt from sources. The company’s prices are effective from 7 August 2024. The miner has fixed prices of DR CLO (10-40 mm, Fe 67%) at INR 6,420/t ($76/t) and of iron ore fines (-10 mm, Fe 64%) at INR 4,610/t ($55/t) on FOR basis from its Bacheli complex. Prices include royalty, DMF and NMET charges. Notably, fines prices have hit ten-month low as these price levels were last seen in October, 2023, data maintained with BigMint showed
• Domestic pellet prices remain under pressure: BigMint’s bi-weekly domestic pellet (Fe 63%) index inched down by INR 50/t ($1/t) to INR 9,050/t ($108/t) DAP Raipur on 6 August, 2024 compared to the last assessment on 2 August. The pellet market in Raipur has remained quiet over the past few days due to lack of interest from steelmakers. Some pellet producers have already sold material for the next few weeks and have therefore closed their sales. Both buyers and sellers are not in a rush to make deals, as sponge makers are also carrying a decent inventory.
• Odisha iron ore prices fall amid weak market sentiments: BigMint’s Odisha iron ore fines (Fe 62%) index fell by INR 150/t ($2/t) w-o-w to INR 4,500/t ($54/t) ex-mines on 3 August, 2024. Iron ore prices in the Odisha region remained under pressure this week following the production and logistic hurdles due to heavy rainfall along with the pressure from downstream steel market.

Outlook

Iron ore concentrate offers are expected to remain under pressure in the near term amid heavy rains in the region and fluctuation in pellet and Odisha iron ore prices.