SteelMint: Odisha iron ore fines index rises further by INR 400/t as miners hike offers

SteelMint’s weekly Odisha iron ore fines index (Fe 62%) moved up further by INR 400/t, w-o-w, to INR 5,300/t ex-mines. Offers rose this week owing to limited high-grade material availability from the merchant miners who have largely exhausted their EC limits.

Rationale:

• T1- Towards the middle of this week SAIL conducted an auction from the Bolani mines for around 8,000 t  of fines (Fe 62.5%) that fetched a price of INR 5,990/t (loaded, including royalty, DMF and NMET). After grade and other adjustments, it was taken under Fe 62% fines calculation. The SAIL Bolani deal was considered under the calculation of the Fe 62% fines index and given 50% weightage.
• T2- SteelMint received eleven (11) offers and indicative prices under T2 trades in this publishing window. Seven (07) were taken into consideration and given 50% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here

As per sources, an eastern India-based pellet player has concluded a deal for around 100,000 t of iron ore fines (Fe 60/61%) at around INR 3,500-3,600/t (ex-mines, including royalty, DMF and NMET). However, it has not been considered for the calculation of the index.

Hike in pellet offers also supported the hike in iron ore lump prices. The current assessment for iron ore pellet (Fe 63%) in Barbil stands at INR 11,100/t loaded on to wagon, up INR 850/t against 21 Jan. Hike in pellet export prices has boosted domestic offers.

Odisha iron ore prices

OMC to conduct 83,000 t iron ore auction on 1 Feb: State PSU miner Odisha Mining Corporation (OMC) has scheduled an iron ore auction for 1 Feb for around 23,000 t of lump ore and 60,000 t of fines. The base price for the auction is yet to be disclosed.

Highlights from other states:

• Bids increase at Karnataka iron ore auction by private miners
  Bids increased at the iron ore e-auction conducted by private miners in Karnataka on 21 Jan. The auction fetched bids for 172,000 t out of 217,000 t. Rai Bahadur Seth Shreeram Narasingdas Pvt. Ltd. and Srikalahasthi Pipes Ltd. were the largest buyers at 32,000 t each followed by Thakur Industries at 24,000 t. Bids for iron ore lump (Fe 63.1%) offered by B. Rudra Gouda increased to INR 3,631/t against INR 3,571/t at the previous auction conducted on 7 Jan.
• 27th iron ore e-auction held in Goa: The Directorate of Mines and Geology (DMG), Goa has notified the base price of the iron ore lots for the 27th e-auction held on 19 Jan. The total quantity put to auction was 2.22 mnt, with the base price in the range of INR 300-450/t. Although results are yet to be announced, the high-grade lots are heard to have fetched bids, as per sources.