SteelMint: Odisha iron ore fines index stable, falling pellet prices weigh on bids

SteelMint’s weekly Odisha iron ore fines (Fe 62%) index remained stable at INR 3,400/t ex-mines. Apart from purchases in auctions, no other deal was reported this week, as market participants did not show much interest in offers prevailing in the market, given the general decline in pellet and sponge iron offers.

SteelMint’s bi-weekly domestic pellet (Fe 63%) index, PELLEX, stood at INR 8,300/tonne (t) DAP Raipur on 2 September, down INR 100/t compared to the last assessment on 30 August, owing to reduced offers by Raipur-based pellet-makers. The index has sunk to a two-month low, as per data maintained with SteelMint.

SteelMint’s daily sponge iron, CDRI, index was assessed at INR 35,100/tonne (t) exw Rourkela on 3 September, down INR 700/t w-o-w.

However, market sources do not expect further sharp correction in iron ore prices in the near term.

Rationale:

T1- No deal was recorded for high-grade ore (Fe 62%) for the index calculation. Therefore, no weightage was given to it this week.

T2- SteelMint received Eight (08) offers and indicative prices under T2 trade deals in this publishing window out of which six (06) were taken into consideration and given 100% weightage. To check SteelMint’s iron ore assessment, pricing methodology and specification documents Click here.

Odidha iron ore prices:

Highlights from other states:

• DR-CLO lots receive active response in NMDC Chhattisgarh auction: In NMDC’s iron ore auction from Chhattisgarh yesterday for 159,600 t (Fe 64-67%, indicative) from the Bacheli mines and 134,400 t (Fe64-65.50%, indicative) from the Kirandul mines the entire quantity of 16,800 t of DR-CLO was booked at INR 5,587/t against the base price of INR 4,957/t. One  lot of Baila lump was booked at the base price of INR 4,131/t. All prices are on FOR basis, royalty, DMF and NMET extra.
• 36,000 t iron ore lump booked at Vedanta auction: Vedanta had scheduled an auction on 3 September for sale of iron ore lumps from its A. Narrain mines in Karnataka’s Chitradurga district. The entire quantity of 36,000 t of lump (Fe59.50%) was booked at around INR 4,625/t against the base price of INR 3,545/t. Prices exclude royalty, DMF and NMET.
• Chandrapur miner sold around 175,000 t iron ore fines: A Chandrapur-based miner sold around 175,000 t of fines (Fe 63%) at INR 3,600-3,700/t FOR Ballarshah this week. Out of the total, around 75,000 t fines was sold to Raipur and the rest 100,000 t to a major steelmaker at the same price. The miner is not offering lump pre currently as it is dispatching old orders and may resume offers in a week or two.