SteelMint: Odisha iron ore fines index rises to over 7-month high

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index increased by INR 350/t to INR 4,850/tonne (t) ex-mines (including royalty, DMF and NMET). The index rose to over seven-month high as similar price levels were seen in mid-May 2022. The majority of merchant miners raised offers on tight availability and hike in pellets offers.

Rationale:

• T1- No deal was reported in fines (Fe 62%) therefore not taken into consideration for the index calculation and given 0% weightage.
• T2- SteelMint has included ten (10) offers and indicative prices under T2 trade deals in this publishing window. Out of this, seven (7) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology, and specification documents Click here.

Reasons behind the hike in iron ore prices:

• Hike in pellet prices – SteelMint’s bi-weekly domestic pellets (Fe 63%) index, PELLEX, stood at INR 9,800/tonne (t) DAP Raipur, up by INR 150/t compared to the last assessment on 3 January, 2023.
• Global iron ore prices remain supported – Chinese iron ore Fe 62% fines prices opened at $117.65/t CNF for the week and were assessed at $119.8/t CNF towards the weekend. Seaborne iron ore prices rose on optimism from the latest supportive property market policies.

Highlights from other states

• NMDC Chhattisgarh hikes iron ore prices – India’s largest merchant iron ore mining company, NMDC, has increased list prices of iron ore recently, SteelMint learnt from reliable sources. The company raised prices of lump ores by up to INR 500-600/t and fines by INR 500/t, effective from 1 January, 2023. NMDC conducted an auction on 5 January for nearly 222,600 t of iron ore from Bacheli mines in Chhattisgarh. The auction received good response for lumps, with the entire quantity of DR-CLO getting booked. Bids for DR-CLO increased by around INR 400/t, while those for Baila fines and run of mine (ROM) ore remained at the base price level.
• Karnataka iron ore auctions receive an active response – Vedanta conducted an auction for 40,000 t of iron ore lumps (6-40 mm, Fe57.75-58.25%) from its A. Narrain mines in Karnataka’s Chitradurga district on 4 January, 2023. According to sources, the entire material was sold at INR 3,560-3,736/t against the base price of INR 3,510-3,516/t. Prices were exclusive of royalty, DMF, and NMET charges.