SteelMint: Odisha iron ore fines index rises INR 300/t on low merchant availability

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index stood at INR 5,700/t ex-mines, up by around INR 300/t. Post OMC iron ore auction, prices of the raw material has increased sharply on the back of low availability of high-grade fines in the market.

As per sources, most of the small merchant miners have less material to offer as they are exhausting their EC limits due to fiscal year end, which has affected the supply side.

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 seven (7) offers and indicative prices under T2 trade deals in this publishing window. Out of these, six (6) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here.

Due to lack of trades in finished steel and falling semi-finished steel and sponge iron prices, buyers are reluctant to make deals. High raw material prices and material availability issues are other reasons for lack of trade.

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, remained stable at INR 10,200/tonne (t) DAP Raipur compared to the last assessment on 21 February. Around 20,000 t of deals were reported in this publishing window.

India iron ore prices:

Highlights from other states:

• Decent quantity booked at NMDC’s Karnataka auction: NMDC conducted an auction for 520,000 t of iron ore (both fines and lumps) from its Donimalai mines in Karnataka on 21 February. According to sources, 68,000 t of lumps (10-40mm, Fe61% indicative) was booked at INR 3,301/t and 160,000 t of fines (Fe59% indicative) was booked at INR 2,872/t. The material was booked at the base price and excludes royalty, DMF, and NMET charges.
• Karnataka e-auctions receive good response: Vedanta conducted an auction for 36,000 t of iron ore lumps from its A. Narrain mines in Karnataka’s Chitradurga district on 22 February. According to sources, SMIORE conducted an auction for 361,000 t iron ore on 22 February out of which 60,000 t fines (Fe57-58.70%) was booked at INR 2,970-3,650/t and 1,000 t of lumps (10-40mm, Fe58.80%) at INR 3,650/t. Fe64.04% material was booked at the base price of INR 4,725/t. Prices were inclusive of royalty, DMF and NMET.