Indian iron ore prices remained stable in 2nd half of Jan’17. However sharp decline in sponge iron prices upto 12% over last month is a concern.
Odisha merchant iron ore miners may reduce prices in-line with sponge iron if all factors remain same. However market sources shared that – any change in Union Budget (which will be announced tomorrow i.e 01 Feb’17) on high-grade iron ore export duty, and falling sponge prices are key factors for Feb’17 pricing.
As per reports, Federation of Indian Mineral Industries (FIMI) has sought for removal of export duty on high grade iron ore (upto 62%) in the upcoming Budget which is presently at 30%.
Key highlights that will govern Indian iron ore prices for Feb’17:
C.G. based sponge plants’ iron ore sourcing increases marginally – Chhattisgarh based sponge plants procured 61 iron ore rakes from NMDC (C.G.) in Jan’17*. Last month they sourced 56 rakes.
JSW Steel’s iron ore sourcing from NMDC (C.G.) remains stable in Jan’17 – JSW Steel, Dolvi procured 57 iron ore rakes from NMDC’s Baialdila mines in Jan’17* against 55 rakes in Dec’16.
Iron ore sourcing of KIOCL and RINL from NMDC (C.G.) fell in Jan’17 – KIOCL procured 47 rakes of iron ore from NMDC (C.G.) in Jan’17* compared to 72 rakes in Dec’16. KIOCL is presently also seen sourcing iron ore from Odisha’s Kaypee Enterprises as per its last concluded tender for supply of 150,000 MT iron ore fines in Oct’16.
Vizag Steel (RINL) has lowered its iron ore purchases from NMDC (C.G.) to 178 rakes in Jan’17* against 190 rakes in Dec’16.
Global iron ore prices remained majorly stable in Jan’17– Iron ore fines (Fe 62%) index kept hovering in the range of USD 80-83/MT, CFR China in major part of Jan’17. However towards the end of Jan’17, prices remained unmoved over ongoing week long holidays of Chinese New Year.
Domestic sponge iron prices fell sharply in Jan’17 – Sponge iron prices observed a down wards movement in Jan’17. Amid limited trade inquiries, C-DRI prices across major Indian markets fell by INR 500-1,000/MT M-o-M. Presently sponge iron price movements are as follows: Durgapur (78 FeM) – INR 13,750/MT del, Ex-Raipur (80 FeM) – INR 15,350/MT, Ex-Bellary (78 FeM) – INR 14,650/MT.
Indian flat steel producers likely to hike prices further in Feb’17- After increasing domestic flat steel prices sharply by INR 3,000/MT M-o-M in early Jan’17, it is heard that major Indian steel biggies are planning another price hike of around INR 1,500-2,000/MT next month.
Despite hike by major Indian steel players, domestic flat steel prices in traders market have witnessed correction in last couple of weeks. Traders mentioned that despite dull domestic demand, Indian steel biggies had hiked prices in Jan’17 which has resulted in increased inventories over which prices started declining since mid Jan’17.
Note: * indicates data updated till 29 Jan’17
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