India: Iron ore fines prices in Karnataka remain supported on positive market sentiments

• Positive sentiments seen in pellets, DRI, steel segments
  
  
• NMDC's price hike keeps iron ore prices supported
  
  

Domestic low-grade iron ore fines (Fe 57%) prices inched up in Karnataka's Bellary. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 2,850/t ($34/t) ex-mines Bellary (excluding taxes), a w-o-w increase of INR 50/t ($1/t). Similarly, the Fe 62% fines index was assessed at INR 4,900/t ($58/t) ex-mines Bellary, including taxes, up INR 50/t ($1/t) w-o-w. Domestic iron ore prices remain supported by the NMDC's price hike and increase in downstream steel prices, BigMint notes.

Some miners in Karnataka have increased their offers for low-grade fines, following the recent dispatch of older materials at previous price levels. This adjustment is aimed at balancing market dynamics and operational costs, leading to higher quotes for new materials. Despite this, trading activity remains subdued as market prices trend upward due to the conclusion of the monsoon season and rising demand.

Rationale:

• No trade was recorded in this publishing window, hence, accorded 0% weightage.
  
  
• Eleven (11) offers and indicative prices were reported, out of which eleven (13) were considered as T2 trades receiving a 100% weightage.
  
  

Market highlights from Karnataka:

• Vedanta's auction fetches active response: Vedanta Limited conducted an auction for 28,000 t of iron ore lumps from its A.Narrain mines, Karnataka, on 3 Oct'24. According to sources, 8,000 t of lumps (6-20 mm, Fe 52%) were booked at the base price of INR 3,140/t, while another 8,000 t of lumps (10-40 mm, Fe 51.5%) were booked at the base price of INR 3,040/t. Prices are on ex-mines/ex-lot basis and exclusive of royalty, DMF, and NMET.
  
  
• Bellary C-DRI prices up w-o-w: Sponge iron (CDRI) prices in Bellary, Karnataka rose by INR 150/t ($2/t) w-o-w to INR 28,650/t ($341/t) against 28,500/t ($339/t) in the last week. Prices increased as trade activity improved following the improvement in demand.
  
  
• Rise in pellet prices w-o-w: Pellet prices in Bellary increased sharply w-o-w by INR 650/t ($8/t) to INR 10,600/t ($126/t) amid the NMDC's price hike and active buying activity due to end of monsoon.
  
  

Outlook

Domestic low-grade iron ore prices are likely to increase in the coming week as trading activity is expected to improve as the market adjusts post monsoon despite current subdued trading conditions.