Iron ore market to stay firm in near term

Captive production to rise in FY22

The iron ore market in India remained firm mainly because of continuous shortage of high-grade iron ore in the Odisha market coupled with rising charges due to higher statutory payments under the MMDR Amendment Act for merchant iron ore sales by government companies.

The shortage of availability for lumps still persist, sources said.

While average lumps offers in Odisha hovered around ₹12,500-14,600 per ton, average fines of Fe 62 percent prices stood at around ₹9,000-9,500 per ton ex-mines, including Royalty, DMF & NMET.

Some leading merchant miners had hiked iron ore fines offers by ₹600-700 per ton and then kept the prices stable as trades were limited.

Some material from Odisha Mining Corporation (OMC) of Fe 62-64 percent grade was heard of receiving bids at ₹8,6008,700 per ton.

Meanwhile, India’s largest merchant iron ore miner NMDC has kept prices unchanged for June deliveries.

The price announcement gave some relief to steel mills and sponge players who were worried about the sharp hike in Odisha iron ore prices.

Meanwhile, some low grade material of Fe 55-57 percent grade received bids at ₹3,500 in Chhattisgarh, sources said.

The coming expiry of key merchant iron ore leases in Odisha has created an apprehension of supply shortage in the market that is expected to keep prices firm in the short term.

In addition, high steel and iron ore pellet prices due to strong domestic and stronger export demand are fueling the rally.