India: Karnataka low-grade iron ore fines prices edge up w-o-w on bullish export sentiments

Domestic low-grade iron ore fines (Fe 57%) prices increased this week in Karnataka's Bellary. Shortage of ore in the region and supportive sentiments from low-grade iron ore export market have pushed up domestic prices, too, SteelMint learnt from sources.

SteelMint's weekly index for low-grade iron ore fines (Fe 57%) stands at INR 3,650/tonne (t) ex-mines Bellary, an increase of INR 100/t, w-o-w.

"Offers have remained supported throughout the week, mainly supported by hike in low-grade fines (Fe 57%) export index prices," a Karnataka-based miner said.

Meanwhile, miners in the state are waiting for NMDC's Donimalai iron ore auction to get a better price clarity. The miner has scheduled an auction for 300,000 t of iron ore - 276,000 t of fines (Fe 54-59%) and 24,000 t of lumps (10-40 mm, Fe 54-59%) on 18 November, 2023. The base price is yet to be announced.

Rationale:

• No trade was recorded in this publishing window, hence, accorded 0% weightage.
  
  
• Eleven (11) offers and indicative prices were reported, with nine (9) of them being considered as T2 trades and receiving a 100% weightage.
  
  

What factors made low-grade prices edge up?

• Supportive low-grade ore export market: SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index rose by around $3/t w-o-w to $86/t FOB east coast on 16 November. As per sources, the Indian iron ore export market remained supported amid improved global spot and futures prices. Offers have remained firm over the last two weeks. Surge in iron ore prices can be attributed to strengthening of demand-supply fundamentals amid the concerns surrounding for production control and sintering cuts.
  
  
• Hike in sponge iron prices: Bellary sponge iron (C-DRI) prices rose w-o-w on 16 November, 2023 by INR 400/t. However, prices witnessed a decrease of INR 100/t, d-o-d.
  
  

Karnataka iron ore sales scenario (9-16 Nov'23)

Outlook

Domestic low-grade iron ore prices in Karnataka are expected to remain firm in the near term amid support from export market. However, NMDC Donimalai's base price revision for its upcoming auction might become a deciding factor.