- OMC auction sets to bid on 19 March
- Buyers are cautious to procure material at higher prices
Iron ore prices in the Odisha market inches down by INR 50 -100/t during the week, although trading activity was moderate and market sentiment appeared slightly uncertain. Market participants indicated that while demand from steelmakers persists, buying activity has slowed due to cautious sentiment and the search for cost-effective raw material.
Price update
BigMint’s Odisha iron ore fines (Fe 62%) index decreased by INR 50/t w-o-w to INR 5,750/t ($64/t) ex-mines on Saturday (14 March). BigMint recorded deals for around 440,000 t this week, concluded directly by steelmakers with private miners and traders.
Few volume also sold in the auction by the other private miners amid the limited availability of material in Odisha market.
Market highlights
According to several buyers in the region, procurement decisions are currently being made on a need-basis as semi-finished steel prices, particularly sponge iron and billets, have witnessed a slight correction in recent days. This has encouraged buyers to seek relatively cheaper iron ore material to maintain production cost viability.
A sponge iron producer mentioned that, “Downstream steel prices have softened slightly in recent days, so buyers are exploring lower-cost raw material options. This has limited aggressive iron ore procurement in the spot market.”
Meanwhile, supply availability in the merchant market remains constrained. Only a few miners are currently offering material, as several merchant miners have reached the Environmental Clearance (EC) production limits for the current financial year. Many of these miners are now new financial year EC limits for releasing fresh cargo into the market.
A trader stated, “Offer volumes are currently limited because many merchant miners have exhausted their EC limits. Most suppliers are waiting for the new financial year approvals before making fresh offers.”
In addition, major steelmakers are reportedly holding back from large-scale procurement ahead of the upcoming auction by the Odisha Mining Corporation (OMC), which is scheduled for 19 March. The auction is expected to provide clarity on price direction and supply availability for the coming weeks.
A steelmaker noted, “Many buyers are waiting for the OMC auction to understand the price trend and availability. Bulk procurement decisions will likely happen in auction and after the auction results.”
At present, market participants remain uncertain regarding the near-term pricing direction due to limited offers and subdued trade volumes. With major miners keeping offers on hold and market liquidity relatively low, price discovery has been restricted.
Factors affecting iron ore prices
Pellet prices mix w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil inched up by INR 100/t w-o-w to INR 9,100/t ($101/t) loaded to wagon on 13 March. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur fell by INR 100/t to INR 10,600/t ($116/t) exw.
Sponge iron prices drop w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela decreased by INR 250/t ($3/t) w-o-w to INR 28,000/t ($307/t) on 14 March.
Billet prices down w-o-w: Meanwhile, steel billet (100*100 mm) prices in Rourkela dropped by INR 250/t ($3/t) w-o-w to INR 41,000/t ($448/t) on 14 March.
Rationale
- T1- Three (3) deals for Fe 62% fines was recorded in the publishing window, and two (2) were considered for price computation. These were given 50% weightage for index calculation.
- T2 – BigMint received Nineteen (19) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Sixteen (16) were taken into consideration and given 50% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document, click here.
Outlook
BigMint expects iron ore prices in the Odisha region to remain volatile, as clearer market direction will emerge after the OMC auction next week. Trading activity is likely to improve thereafter as both buyers and sellers gain better visibility on supply levels and pricing trends in the Odisha iron ore market.
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