SteelMint: Odisha iron ore fines index falls marginally in recent deal, falling pellet prices

SteelMint’s weekly Odisha iron ore fines index (Fe 62%) fell by around INR 300/t w-o-w at INR 5,700/t ex-mines. The drop in pellet offers amidst a fall in export prices have resulted in a lowering of bids. However, most of the buyers are waiting for the upcoming OMC iron ore auction schedule on 18 April, 2022.

Rationale:

• T1- One trade was recorded this week and considered under T1 and given 50% weightage. One of the pellet makers in eastern India has concluded around 45,000 t of iron ore fines for Fe62 grade at around INR 5,500/t (ex-mine, including royalty, DMF and NMET) this week.
• T2- SteelMint received eight (08) offers and indicative prices under T2 trade deals in this publishing window. Seven (07) were taken into consideration and the rest given 50% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here

Odisha iron ore prices:

• OMC cuts base price for upcoming iron ore e-auctions: State-run Odisha Mining Corporation (OMC) has scheduled an auction for iron ore fines and lumps on 18 April, 2022. The miner has decreased the base price for fines by up to INR 350/t and that for lumps by up to INR 500/t as against the base price of last auction on 15 March, 2022.
• Pellet prices drop in eastern India: The current assessment of iron ore pellets (Fe 63%) in Barbil, Odisha stands at INR 10,500/t loaded on to wagon, down by INR 1,000/t against 12 April, 2022. Deals for 20,000 t of pellets were recorded at INR 10,500/t during the present assessment period. India’s pellet (Fe 63%, 3% Al) export index (FoB east coast) decreased by $4/t w-o-w to $161/t from $165/t on 6 April, 2022. Local mills in China have reached their break-even point following the increase in iron ore/coke prices, and Covid has had a moderate impact on social consumption. On the other hand, filling up of credit lines in the EU and decent bookings from India last week have kept demand slow this week from EU buyers.

Highlights from other states:

• Karnataka iron ore e-auction by private miners receives dull response: Private miners in Karnataka had conducted an iron ore e-auction on 12 April in which 117,000 t of material had been booked out of a total of 255,000 t. JSW Steel Ltd emerged as the largest buyer with 72,000 t followed by Vedanta Ltd with 12,000 t. Interestingly, they have booked 40,000 t of low grade iron ore fines of Fe34.56% at INR 325/t. The iron ore fines (Fe61.65%) lot was booked at INR 3,950/t (basic, taxes extra), up INR 225/t compared to booked prices of the same grade a month ago.