Odisha based major merchant miners raised lump prices twice this month. In Sept’16 lump prices in Odisha increased by INR 400-500/MT and fines prices rose up to INR 100/MT. As per market sources report, fines prices in Odisha may increase in the near term.
However, it is anticipated that NMDC, which had kept prices stable in the month of Sept’16, may raise iron ore prices in the coming month owing to increase in sponge iron prices and Odisha iron ore prices.
Key highlights that will govern iron ore prices for Oct’16 –
1.Chhattisgarh based sponge plants significantly increase iron ore sourcing – C.G. based sponge units have procured 56 rakes in Sept’16* from NMDC (C.G.), against 39 rakes in Aug’16. Their sourcing from Odisha has also increased in this month. C.G. based units procured 210 rakes of iron ore in Sept’16* compared to 195 rakes in Aug’16.
2. KIOCL’s iron ore sourcing from NMDC (C.G.) doubled in Sept’16 – Export oriented pellet maker – KIOCL continued with its iron ore purchases from NMDC (C.G.) mines and sourced 20 rakes in Sept’16 * compared to 11 rakes in Aug’16.
3. JSW Steel’s iron ore sourcing falls in Sept’16 – The steel maker procured 51 rakes of iron ore from NMDC (C.G.) in Aug’16 which fell to 32 rakes in Sept’16*. Steel maker’s sourcing from Odisha has also reduced considerably in this month to 50 rakes* compared to 146 rakes in Aug’16
4. RINL’s procurement from NMDC (C.G.) up in Sept’16 – Vizag Steel procured 100 rakes from NMDC (C.G.) in Sept’16* which was 89 in Aug’16
5. Positive sentiments in Indian sponge iron market – Throughout the month of Sept’16, there was sharp increase in sponge iron prices. In Raipur, C-DRI (80 FeM) prices moved up by around INR 2,000/MT M-o-M and is presently seen at INR 15,200/MT (ex-works).
6. Iron ore prices in China fall by USD 4/MT M-o-M – Monthly average iron ore fines (Fe 62%) index which stood at USD 60.5/MT, CFR China in Aug’16 dropped and was recorded at USD 57/MT, CFR China in Sept’16. Limited trade activities amid holidays kept fines prices stable at USD 55-56/MT, CFR China for a long duration in this month.
7. Iron Pellet export continues against domestic availability – Indian pellet exports geared up further in this month. Domestic pellet prices increased up to INR 500/MT M-o-M amid increase in fines and P-DRI prices. As per market sources, some major pellet plants may start offering in domestic market after increase in prices.
Note – * indicates data updated till 28 Sept’16