India: Karnataka iron ore miners await NMDC's upcoming auction for price clarity

Domestic low-grade iron ore fines (Fe 57%) prices in Karnataka stood at INR 2,400/t ex-mines last week, data maintained with SteelMint shows. However, the miners are holding back offers this week amid lack of clarity in prices.

Meanwhile, miners in the state are waiting for the NMDC's upcoming iron ore auctions to get a better price clarity and expecting a price cut owing to weak market sentiments in the region.

The miner has scheduled two iron ore (both fines and lumps) auctions for 304,000 tonne (t) and 700,000 t from Donimalai and Kumaraswamy mines, respectively on 2 June, 2023.

"NMDC has recently announced reduction of INR 300-450/t in iron ore prices from its Chhattisgarh mines, after which miners in the state are expecting the same for Karnataka iron ore prices," said a Karnataka-based miner.

"Buyers in the state are procuring raw material at the moment just for maintaining stocks before the monsoon," another miner said while speaking to SteelMint.

A leading iron ore miner from the state has concluded a deal for 8,000 t of fines (Fe 62.55%) at around INR 3,375/t ex-mines, excluding taxes.

Another deal for 16,000 t of lumps (10-40mm, Fe 63.06%) was concluded at INR 3,470/t ex-mines, excluding taxes.

Karnataka iron ore e-auction scenario

Outlook

If NMDC Karnataka cuts prices for its iron ore auction tomorrow, prices of low-grade fines may come under pressure. Also, the upcoming monsoon in the region might also weigh on iron ore prices.