India: Karnataka's direct iron ore sales prices fall amid weak market sentiments

Domestic low-grade iron ore fines (Fe 57%) prices in Karnataka fell by around INR 250/tonne (t) w-o-w to INR 2,400/t ex-mines, data maintained with SteelMint shows.

Weak response to National Mineral Development Corporation's (NMDC) recent iron ore auctions from the state and lack of clarity in prices have pulled down low-grade fines prices, sources informed SteelMint. Meanwhile, market participants are expecting further price cuts owing to sluggish demand in the region.

As reported earlier by SteelMint, NMDC conducted auction for 762,000 t of iron ore from its Kumaraswamy mines on 11 May. Out of the total quantity offered, only 92,000 t of lumps (10-40mm, Fe 57.48-65.27%) and 112,000 t fines (Fe 59.21-63.18%) were booked at the base price of INR 2,431-3,591/t and INR 2,705-3,253/t, respectively. Prices exclude royalty, DMF and NMET.

Another iron ore auction of around 568,000 t conducted on 15 May by the miner received subdued response. According to sources, only 120,000 t of lumps (10-40 mm, Fe 61%) and 144,000 t of fines (Fe 59%) were booked at base prices of INR 3,132/t and INR 2,877/t, respectively. Prices exclude royalty, DMF and NMET.

"After noticing a weak response in NMDC's iron ore auction, there is no clarity in prices as of now," said a Karnataka-based miner.

A leading iron ore miner from the state has concluded a deal for 32,000 t of fines (Fe 63%) at around INR 3,440-3,550/t ex-mines, excluding taxes.

E-auction scenario

• However, iron ore auctions conducted by Vedanta received an active participation. 16,000 t of iron ore lumps (6-20 mm, Fe 56.5%) from A. Narrain mines were auctioned on 15 May, 2023 which received bids for the entire quantity at a base price of INR 3,421/t. Price excludes royalty, DMF, and NMET.
  
  
• Another auction for 16,000 t of iron ore lumps (10-40 mm, Fe56.5%) on 19 May from the miner saw the entire quantity getting booked at a base price of INR 3,510/t which excludes royalty.
  
  

Outlook

Karnataka's low-grade fines (Fe 57%) prices are likely to remain under pressure in the near-term due to weak market sentiments in the region as some bids and price indications were heard around INR 2,000/t. Also, market participants are eagerly waiting for the upcoming NMDC iron ore auction from Kumaraswamy scheduled for 23 May for better price clarity.