- Over 2.5 mnt of iron ore receives bids in OMC auction
- Fines premium rises by INR 250/t ($3/t) m-o-m
Iron ore fines prices in Odisha have remained supportive following the recent Odisha Mining Corporation (OMC) auction, while lump prices have stayed largely stable. Market participants expect a clearer price direction to emerge as major miners are yet to revise their offers.
BigMint’s Odisha iron ore fines (Fe 62%) index increased by INR 150/t ($2/t) w-o-w to INR 5,000/t ($56/t) ex-mines on 22 February 2025. Around 20,000 t of iron ore fines (Fe60-62%) deals were concluded this week by the other merchant miners. Overall, around 350,000-400,000 t of iron ore (fines and lumps) deals were recorded from Odisha this week except for the OMC auction volume.
The recent OMC auction saw a premium for fines, driven by increased demand and a shortage of higher-grade material. A key Odisha-based trader commented: “The market is currently in a wait-and-watch mode, but given the premiums seen in the auction, fines prices are expected to rise in the coming days. However, uncertainty persists around lump prices.”
Some miners are expected to revise their offers next week. Merchant trades may resume from next week while this week was slow due to OMC auction.
Eastern-based steel producer informed, “Buyers have been actively booking higher-grade material ahead of the financial year closing to avoid last-minute supply concerns. This has added pressure on availability and only a few merchant miners have higher-grade iron ore in their remaining EC.”
While demand for fines remains strong, lump prices may remain stable unless supply-side constraints emerge. Market participants are waiting for the price revision, which will set the tone for transactions in the coming weeks.
Factors affecting iron ore market:
Active response in OMC auction: OMC conducted the auction for 2.617 mnt of iron ore (1.098 mnt of lumps and 1.519 mnt of fines) on 19 February. Entire 100% of lumps (Fe 58-64%) were booked at INR 4,950-8,000/t with a premium of INR 300-1,400/t over the base prices. Buyers actively responded to the auction, which offered a higher volume compared to last month. Around 1.423 mnt (94%) iron ore fines (Fe 55-65%) was booked at INR 3,150-5,250/t ex-mines. The bids fetched a premium of INR 50-450/t for a few lots against the set base price. The miner increased base prices by INR 200-300/t and INR 150/t m-o-m for fines and lumps, respectively. For Fe55% fines, base prices were raised by INR 850/t.
Pellet offers remain stable w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil remained stable w-o-w at INR 8,300/t ($96/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur reported w-o-w unchanged at INR 9,300/t ($107/t) exw on 21 February.
Sponge iron prices stable w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela remained unchanged w-o-w to INR 25,900/t ($299/t) on 22 February. However, steel billet (100*100 mm) offers in Rourkela decreased by INR 150/t ($1/t) w-o-w to INR 37,950/t ($438/t) today.
Rationale
- T1 – Six (6) deals of Fe62% fines were recorded in the publishing window, and three (3) were considered for price computation and given a 50% weightage for index calculation.
- T2 – BigMint received twenty-three (23) offers and indicative prices under the T2 category (offers, indicative, and bids) in this publishing window. Twenty (20) 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:
BigMint’s India pellet (Fe 63%, 3% Al) export index (FOB east coast) remained stable w-o-w at $104.5/tonne (t) on 19 February. An eastern India-based exporter sold 75,000 t (Fe62%) at $115.5/t CFR China. A domestic pellet maker concluded an export deal for around 50,000 t of pellets (Fe 63%, 2% AL2O3) at $108-109/t FOB India.
BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index remained largely stable w-o-w at $69/t FOB east coast, India, on 20 February 2025. However, prices rose by $2/t against the previous assessment on 17 February. Odisha-based miners sold around 110,000 t of iron ore fines (Fe 57%) at $80/t CFR China recently. In other deals, 75,000 t of fines (Fe57%) were recorded at $67/t FOB concluded a couple of days back. A few more deals a under negotiation.
Outlook
According to BigMint analysis, the iron ore prices in the eastern region will get a better picture next week following the fresh offers from merchant miners and the acceptability of these offers by the steelmakers.
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