- Offers remain limited as most miners’ ECs nearly exhausted
- Trade slows amid tight supply, ample iron ore stocks with mills
Iron ore prices in the Odisha region remained stable w-o-w on 7 March, supported by a firm downstream steel market and higher offers from miners. The recent surge in sponge iron and semi-finished steel prices provided strong support to iron ore prices, keeping the market sentiment positive despite limited trading activity.
Price update
BigMint’s Odisha iron ore fines (Fe 62%) index remained stable w-o-w to INR 5,800/t ($64/t) ex-mines on Saturday (7 March). BigMint recorded deals for around 130,000 t this week, concluded directly by steelmakers with private miners and traders.
However, trading activity slowed this week due to limited availability of material, along with the Holi festival in the middle of the week.
Market highlights
Despite the stability in prices, trading in the region remained relatively slow this week due to limited availability of material. Several merchant miners’ environmental clearance (EC) limits for the current financial year are nearly exhausted, which has restricted fresh supply in the market. As a result, buyers procured iron ore mainly on a need-based basis at relatively higher prices.
A trader based in Odisha said, “Material availability is limited as many miners have almost completed their EC limits for this financial year. Buyers who need immediate material are securing deals, but bulk buying interest is still limited.” A few miners even stated that they are no longer accepting fresh orders, as their EC limits are nearly exhausted and dispatches for previously concluded deals are still pending.
Another market participant stated that some steelmakers were procuring material cautiously, as they have sufficient inventory for the remaining period of the financial year. “Most steelmakers had already built inventory earlier. Therefore, they are not aggressively entering the market despite the rising prices,” the participant added.
Buyers are now waiting for the upcoming auctions by the Odisha Mining Corporation (OMC), expected in mid-March, to secure bulk material at competitive rates.
Additionally, market participants highlighted that recent geopolitical tensions have led to a sharp rise in global steel prices, which has indirectly supported iron ore prices in the domestic market.
Factors affecting iron ore prices
Pellet prices rise 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 9,000/t ($99/t) loaded to wagon on 6 March. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur rose by INR 100/t to INR 10,700/t ($116/t) exw.
Sponge iron prices up w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela increased sharply by INR 1,450/t ($16/t) w-o-w to INR 28,250/t ($307/t) on 7 March.
Billet prices surge w-o-w: Meanwhile, steel billet (100*100 mm) prices in Rourkela declined by INR 2,300/t ($25/t) w-o-w to INR 41,250/t ($448/t) on 7 March.
Rationale
- T1- One deal for Fe 62% fines was recorded in the publishing window, and one (1) were considered for price computation. These were given 50% weightage for index calculation.
- T2 – BigMint received Seventeen (17) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Fifteen (15) 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 firm, with trading likely to continue on a need-based basis until fresh supply emerges in the market.
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