India: Odisha iron ore fines index under pressure, pre-monsoon restocking awaited

• Major buyers stay away from spot deals
• Miners sustain offers, but bids lowered

Iron ore prices in Odisha continued to face downward pressure this week as weak demand from the downstream steel sector weighed heavily on market sentiments. Sponge iron and finished steel prices declined further over the past two weeks, prompting traders to adopt a cautious, wait-and-watch approach.

Price & trades

BigMint’s Odisha iron ore fines (Fe 62%) index remained stable w-o-w at INR 5,100/t ($60/t) ex-mines on 31 May. Notably, deals of around 460,000 t of iron ore (fines and lumps) were recorded by BigMint in Odisha, which were concluded at lower, discounted prices this week.

Higher-grade deals were limited in the market due to a lack of available material. Suppliers demanded higher rates, while many buyers chose to refrain from making purchases.

Market comments

Market participants reported a slowdown in trading activity, with many buyers refraining from fresh bookings and holding procurement in anticipation of clearer pricing signals. A buyer added, “The current iron ore prices are still relatively high when compared to the falling pellet and sponge iron prices. At these levels, procuring raw materials is becoming increasingly unviable.”

Miners, however, have been reluctant to reduce prices aggressively, further slowing down restocking activity among buyers. An iron ore trader mentioned, “Miners are maintaining a firm stance on pricing, which does not align with the current market dynamics. This is keeping buying sentiment subdued.”

Nevertheless, some deals were concluded at negotiable rates by a few miners, reflecting growing pressure to offload inventories amid tepid demand. While another miner commented, “We managed to strike a few deals at slightly lower prices against the current offers, but overall, the market remains weak.”

Factors affecting iron ore prices

• Pellet offers stable w-o-w: Pellet (6-20 mm, Fe 62.5%) prices in Odisha’s Barbil remained stable w-o-w at INR 8,050/t ($94/t) loaded to wagon. Pellet (Fe 62.5%, 6-20 mm) prices in Durgapur are unchanged w-o-w at INR 8,600/t ($101/t) exw on 30 May.
• Sponge iron prices drop w-o-w: According to BigMint’s assessment, sponge iron C-DRI (FeM 80%) prices in Rourkela fell by INR 600/t ($7/t) w-o-w to INR 24,500/t ($286/t) on 31 May. Meanwhile, steel billet (100*100 mm) offers in Rourkela dropped by INR 800/t ($9/t) w-o-w to INR 38,000/t ($444/t) today.

Rationale

• T1- One (1) deals for Fe62% fines were recorded in the publishing window, and considered for price computation and given 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. 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

According to BigMint’s analysis, iron ore prices are expected to remain under pressure as steelmakers continue to face low margins and maintain limited procurement. Unless there’s a significant rebound in the downstream steel market, pricing corrections may persist in the near term.