- Iron ore offers drop INR 200-300/t
- Buyers focus on Feb-Mar’25 inventory restocking
Iron ore prices declined this week due to the revision in iron ore offers after a drop in Odisha OMC auction bids and a growing disparity between bid and offer prices in the domestic market. While need-based trades were concluded at revised offers, volumes remained subdued as buyers showed caution.
BigMint’s Odisha iron ore fines (Fe 62%) index fell by INR 100/t ($1/t) w-o-w to INR 4,900/t ($57/t) ex-mines on 25 January 2025. Around 20,000 t iron ore fines (Fe60-62%) deals were concluded at INR 4,700-5,000/t ($55-58/t) ex-mines this week. Overall, around 300,000 t of iron ore (fines and lumps) deals were recorded from Odisha this week.
A market participant said, “Buyers have shifted focus to February and March restocking, anticipating potential material shortages during FY’25 as more miners approach EC expiration. It has tightened the availability, particularly of higher-grade material. We are securing inventory now to avoid a supply crunch in the coming months.”
Another steelmaker informed, “However, trades are primarily happening at lower price levels, as higher production costs for pellets, sponge iron, and finished steel weigh on buyer sentiment, keeping the market cautious.”
Factors affecting iron ore prices:
Drop in iron ore offers: Odisha-based prominent merchant miners dropped their iron ore offers by INR 200-300/t ($2.5-3.5/t) this week post-OMC auction. The fall in the recent OMC auction bids forced private miners to reduce the iron ore prices as market participants remained cautious about trading material at previous offers.
Pellet offers stable w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil remained unchanged w-o-w at INR 7,900/t ($92.5/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur also remained stable w-o-w at INR 9,250/t ($108/t) exw on 24 January. Market sources highlighted the preference of sponge iron players for lumps over pellets.
Sponge iron prices stable w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela remained stable w-o-w at INR 25,500/t ($296/t) on 25 January. Similarly, steel billet (100*100 mm) offers in Rourkela inched up by INR 150/t ($2/t) w-o-w to INR 37,750/t ($438/t) yesterday.
Rationale
- T1 – Two (2) deals of Fe62% fines were recorded in the publishing window, and both were considered for price computation and given a 50% weightage for index calculation.
- T2 – BigMint received twenty-four (24) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Nineteen (19) were taken into consideration and given a 50% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document, click here.
Raw material export market:
India pellet (Fe 63%, 3% Al) export index (FOB east coast remained stable w-o-w at $103/t on 24 January. India-based pellet maker concluded around 200,000 t of the pellet (Fe 63%) export deals this week ahead of the Lunar holidays.
BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index rose by $1.5/t w-o-w to $67.5/t FOB east coast, India, on 23 January 2025. Three deals of around 165,000 t Fe57% fines were recorded at $75-77/t CFR China this week. Another two deals of 155,000 t Fe55-56% fines were recorded at $60-64/t FOB East Coast, India.
Outlook
According to BigMint analysis, iron ore prices are expected to remain stable amid the recent reduction in offers by miners. The impact of the export market on Odisha raw materials will also be minimal due to muted activity amid the Chinese Lunar holidays.
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