- Odisha mines impacted by monsoon rains
- Iron ore export offers improve w-o-w
- Sponge, billet drop over INR 700/t w-o-w
BigMint’s Odisha iron ore fines (Fe 62%) index inched down by INR 50/tonne (t) w-o-w to INR 4,700/t ($56/t) ex-mines on 6 July, 2024. No deals of standard Fe62% fines were recorded from the merchant miners. However, direct deals of around 400,000 t of various grades were concluded in the Odisha region by mills this week.
Iron ore prices in Odisha remained range-bound this week following moderate trading activity by the steelmakers. However, major miners did not offer the higher grade fines.
A miner said: “Pellet prices remained under pressure in the domestic market while some deals were witnessed in the pellet export market. However, domestic iron ore buyers did need-based purchases through price negotiations. We have sold some decent quantity this week in both fines and lumps. However, in the coming days, we may face some operational issues due to heavy rains forecasted in the Odisha region.”
On the other hand, some participants said that material shortage is seen in some mines which have been impacted by heavy rains and which led to logistic bottlenecks as well.
A buyer said, there is lack of price clarity in the market as participants are not sure about the sustainability of the current levels. They feel these may also fluctuate in the near term. Sponge and billet prices dropped while iron ore export offers shot up this week. This trend has confused mills regarding the current tradable prices of iron ore.
Rationale:
- T1- No deals of Fe 62% fines were recorded in this publishing window so not taken for price computation. These were given 0% weightage for index calculation.
- T2- BigMint received twenty-five (25) offers and indicative prices under T2 trade deals in this publishing window. Fourteen (14) were taken into consideration and given 100% weightage. To check BigMint’s iron ore assessment, pricing methodology, and specification document Click here
Market highlights:
- Pellet offers range bound w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil remained largely stable w-o-w. The current assessment stands at INR 7,650/t ($96/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur inched down by INR 50/t w-o-w to INR 8,400/t ($107/t) exw on 5 July.
- Fines export prices rise w-o-w: BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $5/t w-o-w at $63/tonne (t) FOB east coast on 27 June 2024. Around 110,000 t Fe 57% fines deals were recorded from India at $76-77/t CFR China in this publishing window. The discount for lower-grade fines was 25-26% on the global fines index and remained stable compared to last week.
- Sponge iron prices fall w-o-w: BigMint’s assessment for sponge iron C-DRI (FeM 80%) prices in Rourkela increased INR 750/t ($9/t)w-o-w to INR 26,000/t ($309/t) on 6 July. Meanwhile, steel billet (100*100 mm) prices in Rourkela dropped by INR 750/t ($9/t) w-o-w to INR 39,000/t ($467/t) today.
Outlook
Iron ore prices in Odisha are expected to remain volatile amid mixed sentiments in the domestic and export markets. Buyers are waiting for clarity on raw material prices as well.
A trader said that the drop in sponge and finished steel prices put pressure on miners to correct current offers. But tight availability of the same can support prices in the near term.
Iron ore dispatches from several key mines of Odisha Mining Corporation Ltd. (OMC) have been temporarily suspended due to local unrest. If this continues, prices may rise, said sources
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