India: Karnataka iron ore prices remain stable w-o-w as NMDC rolls over auction tags

• NMDC's 30 Jan iron ore auction sees decent response
  
  
• Market anticipates positive changes in MRT bill
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained flat this week in Karnataka's Bellary region. BigMint's weekly index for the same (Fe 57%) stood unchanged w-o-w at INR 2,900/tonne (t) ($33/t) ex-mines Bellary (excluding taxes).

Notably, the National Mineral Development Corporation (NMDC) has rolled over iron ore prices, which, along with material shortages, helped sustain domestic prices amid need-based procurement. Additionally, the company's recent iron ore auctions at its Donimalai mines garnered a decent response.

Meanwhile, the Fe 62% fines index was assessed at INR 4,800/t ($55/t) ex-mines Bellary, including taxes. Additionally, some offers were noted at higher levels, that is INR 4,950-5,350/t ($57-62/t), due to a demand-supply mismatch in the region. However, no deals were concluded at these offers, as buyers were not yet ready to accept the increased prices.

NMDC Karnataka's list prices of iron ore fines (-10 mm, Fe 58%) and lumps (10-40 mm, Fe 58%) stood at INR 3,537/t ($41/t) and INR 4,224/t ($49/t), respectively, for the Donimalai auction on 30 January 2025. List prices remained unchanged from the previous revision on 21 January 2025. The auction witnessed bookings of 28,000 t: 20,000 t of fines (Fe 58%) were booked at INR 3,677/t ($42/t) against the base price of INR 3,537/t ($41/t), while 8,000 t of lumps (10-40 mm, Fe 58%) were booked at INR 4,364/t ($50/t) against the base price of INR 4,224/t ($49/t).

The Karnataka Mineral Rights and Mineral Bearing Land Tax Bill 2024 continued to be the most pressing issue within the domestic minerals industry. The potential implications of the bill have raised concerns about its severe impact on mineral taxes, prices, and the broader economic landscape. In the same line, a major Bellary-based buyer said, "The situation in Karnataka remains largely unchanged following the governor's order. The price gap between fines and lumps has widened." However, there is optimism that some clauses may be relaxed during the re-verification process.

Additionally, several market participants were absent this week. Another buyer from the region informed BigMint, "Miners, apart from NMDC, are not offering. Attempts to sell at higher prices have resulted in unsold auctions. Production has declined following the introduction of the MRT."

Rationale

• Zero (0) trades were recorded in this publishing window, so T1 trade received 0% weightage.
  
  
• Fourteen (14) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades. Hence, this category was accorded 100% weightage.
  
  

Karnataka iron ore sales scenario (24-30 January 2025)

Outlook

Domestic low-grade iron ore prices are expected to remain volatile amid the current market dynamics in the region. Meanwhile, the market is closely monitoring the situation around the MRT bill. Participants expect that certain clauses might be relaxed following yesterday's meeting with the governor, which could potentially provide relief.