SteelMint: Odisha iron ore fines index rises INR 50/t; market waiting for OMC auction result

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index rose marginally by INR 50/t to INR 4,900/tonne (t) ex-mines (including royalty, DMF and NMET). The market witnessed limited trade activities this week as the majority of buyers are waiting for the outcome of OMC’s auction scheduled next week.

Rationale:

• T1- No deal was reported for fines (Fe 62%) and, therefore, not taken into consideration for index calculation. Given 0% weightage.
• T2- SteelMint has included seven (07) offers and indicative prices under T2 trade deals in this publishing window. Of these, six (06) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here

Factors driving up fines index:

• Hike in base price by OMC – Odisha Mining Corporation (OMC) has scheduled an auction for 1.05 mnt of iron ore (650,000 t of fines, Fe54-64%, and 400,000 t of lumps, Fe62%) on 17 January, 2023. The miner has raised the base price for fines by up to INR 1,250/t against its last auction in December.
• Pellet offers continue to rise – SteelMint’s bi-weekly pellets (Fe 63%) assessment stood at INR 8,850/tonne (t), loaded to wagon in Barbil, up INR 100/t compared to last week.
• Global iron ore prices rise on restocking needs – Chinese spot iron ore fines Fe 62% prices stood at $127/t CNF China on 13 January, up $7.2 w-o-w, against $119.8/t CNF China in the previous week. Seaborne iron ore prices rose w-o-w on prospects of market revival following the Lunar New Year holidays.

India iron ore prices:

NMDC’s iron ore auction from Chhattisgarh receives flat bids – NMDC had scheduled an iron ore auction from Chhattisgarh for 8,000 t of sized Baila lump (Fe 65.5%, indicative) from its Bacheli mines. According to sources, the entire quantity was sold for a premium of INR 30-40/t over the base price.

Karnataka iron ore auctions receive decent response – NMDC conducted an auction for 576,000 t of iron ore from its Kumaraswamy mines in Karnataka on 7 January. Around 128,000 t of lumps (10-40mm, Fe64.14-64.97%) was booked at the base price of INR 3,472-3,598/t, while 344,000 t of fines (Fe62.19-63.31%) was booked at the base price of INR 2,464-2,835/t. Vedanta conducted an auction for 20,000 t of iron ore lumps (Fe58.5%) on 13 January. The entire quantity was booked at INR 4,132/t against the base price of INR 3,722/t (excluding royalty, DMF, and NMET).