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BigMint: Karnataka domestic market awaits NMDC's price revision for price clarity

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Fines/Lumps

BigMint Bureau

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25 Jan 2024, 21:06 IST

BigMint: Karnataka domestic market awaits NMDC's price revision for price clarity

Market awaits NMDC Donimalai auction

No active trades reported in domestic market

Drop in sponge CDRI prices have also put pressure on prices

Domestic low-grade iron ore fines (Fe 57%) prices remained unchanged this week in Karnataka's Bellary. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,800/t ($46/t) ex-mines Bellary, stable, w-o-w.

Absence of trades amid bid-offer disparities and weak sponge iron (CDRI) market sentiments collectively weighed on Karnataka's low-grade iron ore prices, BigMint noted. Some miners are even targeting INR 4,000/t ex-mines but no deals were reported as previous deliveries of old orders are ongoing.

However, few bulk deals of low-grade were reported previously at comparatively lower offers by around INR 500-600/t than private miners, sources informed BigMint.

"3-4 miners in the region have exhausted their EC's and not much deals are being reported in the domestic market as export prices have rebounded", mentioned a Bellary-based miner.

Market participants in the state are waiting for NMDC's Donimalai iron ore auction to get a better price clarity and expecting a price hike followed by the miners' recent price rise announcement in Chhattisgarh.

It is to be noted that NMDC CG, increased list prices of iron ore on 24 January, 2024. The company has increased prices of DR-CLO by INR 300/t ($4/t) and fines by INR 400/t ($5/t), effective from 24 January, 2024. The miner fixed prices of DR-CLO (10-40 mm, Fe 67%) at INR 7,220/t ($87/t) and those of iron ore fines (-10 mm, Fe 64%) at INR 5,310/t ($64/t). Prices are on FOR basis from Bacheli complex and include royalty, DMF and NMET charges.

Meanwhile, NMDC Donimalai has scheduled an auction for 4,000 t lumps (10-40 mm, Fe 59%) and 24,000 t fines (Fe 59%) on 25 Jan'24. The floor prices are yet to be declared by the company. In its previous auction on 17 Jan'24, 20,000 t of fines (Fe 59%) and 8,000 t of lumps (10-40 mm, Fe 59%) got booked at base price of INR 3,542/t and INR 3,694/t, respectively. Prices are on FOR, ex-stockpile/mines basis, including royalty, DMF and NMET.

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $8/t w-o-w to $90/t FOB east coast on 25 January, 2024. Iron ore fines export offers saw an uptick this week after improvements in the economic outlook in China for the near term. However, only a few sellers received decent offers inquiries for lower grade fines while others kept hold of their offers.

Rationale:

No trade was recorded in this publishing window and was accorded 0% weightage.

Eight (8) indicative prices were reported, out of which seven (7) were considered as T2 trades receiving 100% weightage.

Outlook

Domestic low-grade iron ore prices in Karnataka are expected to remain supported in the near term amid export price rally and shortage of material in the region. However, trades might remain under pressure.