India: Low-grade iron ore fines prices in Karnataka remain supported on tight supply

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 notes.

However, weak sentiments in the pellet market have become a matter of concern in the region which might weigh on prices. Bellary pellet prices have witnessed a w-o-w drop of around INR 350/t.

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

"Offers have remained range-bound this week, mainly supported by low-grade fines (Fe 57%) export index price", a Karnataka-based miner said.

Rationale:

• One (1) trade of around 300,000 t was recorded in this publishing window which was taken into consideration and accorded 50% weightage.
  
  
• Twelve (12) offers and indicative prices were reported, with eleven (11) of them being considered as T2 trades and receiving a 50% weightage.
  
  

Factors supporting prices:

• Hike in e-auction bids: NMDC conducted an auction for 312,000 t of iron ore from the Kumaraswamy mines on 3 November. 168,000 t of lumps (10-40 mm, Fe 60.64-63.31%) was booked at INR 4,462-4,966/t against the base price of INR 3,279-3,736/t, while 144,000 t fines (Fe 57.84-63.27%) was booked at INR 2,631-4,940/t against base price of INR 2,611-3,480/t. Notably, bid prices for lumps and fines rose by INR 1,290/t and INR 1,460/t, respectively.
  
  
• Supportive low-grade ore export market: SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $83/t FOB east coast on 9 November. As per sources, iron ore export prices remained supportive amid enhanced bids from China. Some market participants sold material in the export market as the domestic fines market remained under pressure and buying activity was sluggish in the festive season.
  
  
• Hike in sponge iron prices: Bellary sponge iron (C-DRI) prices rose on 9 November. Prices in the region increased by INR 300/t d-o-d.
  
  

Karnataka iron ore sales scenario (2-9 Nov'23)

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, declining pellet prices in the region may become a deciding factor.