Limited availability of high-grade iron ore in Odisha has widened the price gap between different grades of ore. SteelMint’s weekly index for Odisha iron ore fines (Fe 62%) is assessed at INR 9,150/t (ex-mines, including royalty, DMF and NMET), unchanged since the last assessment. However, the index for Fe 63% iron ore rose by INR 500/t w-o-w. All merchant miners in Odisha have kept iron ore offers stable except Serajuddin. However, trading remains limited.
Major Odisha-based merchant iron ore miner Serajuddin and Co. has revised offers from its Balda iron ore block with effect from 15 Jun’21. The current offer price for lump ore (5-18 mm, Fe 63%) is heard at around INR 13,750/t, ex-mines (including royalty, DMF & NMET), while the offer for fines (Fe 63%) stands at INR 10,300/t.
As per market sources, a deal for around 50,000 t of iron ore fines (Fe 62%) got concluded this week at around INR 9,000/t ((ex-mines, including royalty, DMF and NMET). However, the deal had not been confirmed by the buyer till the time of publishing this index.
Recent trade and rationale:
- SteelMint has received fifteen (15) offers, indicative prices under T2 trade in this publishing window and fourteen (14) were taken into consideration and given 100% weightage. To see SteelMint’s iron ore assessments, pricing methodology and specification documents Click here
- Market participants highlighted that offers for iron ore lump (5-18mm, Fe 63%) are at INR 14,000-14,700/t, exw. However, a trader in Odisha has reportedly concluded an iron ore lump deal at around INR 13,750/t, ex-mines, although the deal is subject to final confirmation from the supplier’s side. The market is still witnessing shortage in availability of high-grade material and a few buyers are preferring to purchase pellets due to the longer delivery cycles for iron ore.
Odisha iron ore prices:
NMDC’s operating shifts improve, monsoons still hurting production – NMDC has resumed operations in three shifts compared to the previous two shifts in May due to lockdown restrictions. However, even after resumption of full operations, the onset of monsoon and fog are likely to impact production. NMDC produced 2.79 mn t of iron ore in May, down 11% from 3.13 mn t in April.
The state-owned miner’s long-term iron ore export contracts with Japanese steel mills (JSMs) and South Korea’s POSCO will not be renewed, as SteelMint has recently reported. The reason is that the Centre has withdrawn the benefits (primarily reduced export duty of 10%) it used to provide to NMDC in offering these contracts. That apart, the government’s decision to discontinue the contracts resulted from the ongoing tight merchant availability of iron ore in Odisha.
According to trade sources, FICCI Chhattisgarh has urged the state govt to implement pre-emption or first right of iron ore for state-based end-user plants. This will ensure uninterrupted supply of iron ore to the state-based plants at reasonable rates, FICCI has reasoned.
NMDC to auction 168,000 t iron ore fines from Chhattisgarh – The leading miner will conduct an auction for 63,000 t of iron ore fines (Fe 61%) on 24 Jun from its Bacheli mines in Chhattisgarh. The company has recently announced another auction for 105,000 t of iron ore slimes (Fe 57/58%) from Bacheli scheduled for 23 Jun.
SAIL may resume iron ore auctions from Jharkhand soon – State-run Steel Authority of India Ltd (SAIL) may soon receive permission for resumption of iron ore sales through auctions from its mines in Jharkhand, sources intimated SteelMint. SAIL’s Gua mine in Jharkhand has stocks of around 30 mn t of iron ore fines (Fe 60-61%), while the Kiriburu and Meghahatuburu mines have a combined stock of around 5 mn t of iron ore tailings.
Bids remain stable in NMDC’s Donimalai e-auction – NMDC Donimalai mines conducted an iron ore e-auction on 18 Jun at which 228,000 t out of a total of 600,000 t of iron ore got sold. JSW Steel Ltd remained the largest buyer at 100,000 t followed by RINL at 80,000 t. The bids received for iron ore fines (Fe 59%) remained stable at INR 4,605/t and lump (Fe 61%) prices were at INR 6,348/t against INR 6,348-6,618/t in the last e-auction conducted on 13 May. Prices mentioned are basic, taxes extra.
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