India: Iron ore fines prices stable w-o-w, market awaits NMDC Kumaraswamy auction outcome

Domestic low-grade iron ore fines (Fe 57%) prices continued to remain stable this week in Karnataka's Bellary. Shortage of ore in the region and decent deals at current offers have kept low-grade ore prices supported, SteelMint observed.

However, weak sentiments in pellet and sponge (CDRI) markets have become a matter of concern in the region which might weigh on prices. Bellary pellet and sponge (CDRI) prices have witnessed a w-o-w drop of around INR 100/t and INR 150/t, respectively.

SteelMint's weekly index for low-grade iron ore fines (Fe 57%) stands at INR 3,550/tonne (t) ex-mines Bellary, unchanged, w-o-w.

Meanwhile, miners in the state are waiting for NMDC's Kumaraswamy iron ore auction to get a better price clarity and expecting a price revision for November, 2023 deliveries.

NMDC has released notification for an auction of 264,000 t of iron ore on 3 November, 2023 from its Kumaraswamy mines. Out of the total quantity, 168,000 t are lumps (10-40 mm, Fe 60.64-63.31%) and 96,000 t are fines (Fe 62.94-63.27%). The floor prices are yet to be declared by the company, which will be on ex-mines basis and inclusive of royalty, DMF and NMET.

Rationale:

• One (1) trade of around 200,000 t was recorded in this publishing window which was taken into consideration and accorded 50% weightage.
  
  
• Eleven (11) offers and indicative prices were reported, with ten (10) of them being considered as T2 trades and receiving a 50% weightage.
  
  

Karnataka iron ore sales scenario (26 October-2 November, 2023)

Outlook

Domestic low-grade iron ore prices in Karnataka are expected to remain supported in the near-term amid tight supply of low-grade material in the region. However, NMDC's price revision in its recent auction might become a deciding factor.