SteelMint’s weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 5,700/t ex-mines. However, market sources informed that fewer offers appeared this week. Most miners held back offers due to dispatch-related issues while some of them have nearly exhausted their EC limits for this fiscal.
Grade mismatch
During the last month it has been noted that the grade determined by the DDCA Laboratory (Form-K) is abnormally high or low in contrast with the grade obtained by Odisha-based miners through internal analysis. Following this, the Odisha government imposed heavy penalities on some miners. Meanwhile, miners have protested in some cases asking for umpire sample study, under OMPTS guidelines. The anomaly in grade has become a regular occurrence, and Form-K reports are unnaturally high or low for most of the stacks.
According to iron ore miners in Odisha, this has led to an interruption in dispatch and shortfall in MDPA targets, space constraints in mines due to non-evacuation of stacks, issue in filing monthly returns, etc.
Rationale:
T1- No deal was reported in fines (Fe 62%) and, therefore, not taken into consideration for the index calculation. Given 0% weightage.
T2- SteelMint has included six (6) offers and indicative prices under T2 trade deals in this publishing window. Out of these, five (5) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here.
SteelMint’s bi-weekly domestic pellets (Fe 63%) index, PELLEX, remained stable at INR 10,200/tonne (t) DAP Raipur compared to the last assessment on 24 February. No deal was reported in this publishing window due to low buying interest. Market participants are currently in a wait-and-watch mode. NMDC’s price revision is round the corner and so buyers are more cautious about concluding deals and are expected to remain silent ahead of the Holi festival.
India iron ore prices:
Highlights from other states:
Total quantity booked at NMDC’s Chhattisgarh auction: NMDC conducted an iron ore auction from Chhattisgarh for 10,000 t of sized Baila lump (Fe 65.5%, indicative) from its Bacheli mines on 2 March. According to sources, the entire quantity was booked at INR 4,996-5,006/t against the base price of INR 4,836/t. The floor price excludes royalty, DMF and NMET charges, and delivered FOT (by truck) ex-mine.
Karnataka e-auctions receive good response: R Praveen Chandra conducted an auction for 24,000 t of iron ore lumps on 27 February, out of which 12,000 t of lumps (Fe57.7-62.8) were booked at INR 3,796-4,660/t. Vedanta conducted an auction for sale of 32,000 t of iron ore lumps from its A. Narrain mines in Karnataka’s Chitradurga district on 28 February. According to sources, the entire quantity offered (10-40mm, Fe57.25%) was booked at INR 3,729/t against the floor price of INR 3,689/t. All prices were exclusive of royalty, DMF, and NMET charges.
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