Iron ore prices in month of Jun’16 is expected to remain under pressure due to over supply of iron ore and continuous decline in sponge iron prices in domestic market.
Odisha based merchant miners may reduce price marginally however Chhattisgarh sponge iron units are hopeful that NMDC will reduce prices to support declining sponge iron price. Fall in global iron ore prices along with decline in domestic sponge iron prices may put Indian iron ore prices under pressure.
Market highlights that will decide domestic iron ore prices for Jun’16
- Spot iron ore prices in China have witnessed sharp fall of around USD 14/MT M-o-M in May’16. Current offers of imported South African lump are assessed at USD 65-66/MT, CFR Kandla for Jun’16 deliveries
- Sponge iron (C-DRI) prices in Chhattisgarh in May’16 fell by upto INR 600/MT, West Bengal by INR 400/MT and Odisha by INR 700/MT M-o-M
- In Odisha, prices of lump (Fe 63%) are currently seen at INR 2,150-2,225/MT and fines (Fe 63%) are seen at INR 1,100-1,300/MT (ex-mines inclusive of Royalty, DMF & NMET)
- Iron ore sales from Odisha to Chhattisgarh based sponge iron units moved up marginally. Chhattisgarh based units procured 256 rakes in May’16* against 251 rakes in Apr’16
- NMDC’s iron ore supply to Chhattisgarh increased post deduction in prices in May’16. NMDC supplied 56 rakes in May’16* against 38 rakes in Apr’16 to Chhattisgarh based sponge units. However average rake supply from NMDC (C.G.) to C.G. based units in FY15 was 74 rakes. Thus the present figure is still less compared to the average dispatches
- JSW Steel sourced 30 rakes of iron ore from NMDC Chhattisgarh in May’16* against 41 rakes in Apr’16. In May’16* JSW Steel bought only 44 rakes of iron ore from Odisha against 105 rakes in Apr’16. Rather it increased its purchases from Karnataka e-auctions in May’16
- RINL sourced 113 rakes of iron ore in May’16* from NMDC Chhattisgarh against 113 rakes in Apr’16
Note-*indicates data updated till 27 May’16
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