India: Low-grade iron ore fines prices remain stable w-o-w in Karnataka despite limited trades

• NMDC's 26 Nov iron ore auction sees active response
  
  
• Volatility in sponge iron market prompts price drop
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained flat this week in Karnataka's Bellary region. BigMint's index for the same (Fe 57%) stood unchanged w-o-w at INR 3,100/tonne (t) ($37/t) ex-mines Bellary (excluding taxes).

However, the Fe 62% fines index was assessed at INR 5,200/t ($62/t) ex-mines Bellary, including taxes, reflecting an increase of INR 50/t ($1/t) amid supply-demand disparities. Decent trades were witnessed at this level this week.

Miners maintained stable pricing, with no adjustments in offers. Market activity was subdued, with minimal movement. Presently, miners are prioritising dispatches of older inventory over initiating fresh sales, signalling a temporary market pause as they focus on clearing existing stocks. A source informed BigMint that low-grade material is in limited supply in the merchant market, as miners do not have material of the required grade. A buyer added, "Although we have not made any inquiries this week, prices should remain at this level. However, there are no active offers for this grade."

Additionally, several market participants were absent this week. One such miner informed BigMint, "We are currently prioritising the dispatch of our previous orders due to their large volume, so we have decided not to make any new offers at this time."

Meanwhile, the market is awaiting the results of today's iron ore auction from the National Mineral Development Corporation (NMDC) for price clarity. The auction, which will be held from the Kumaraswamy mines, features an offered quantity of 272,000 t, comprising 176,000 t of fines (Fe 53.54-63.08%) and 96,000 t of lumps (10-40 mm, Fe 62.05-63.18%).

Rationale

• Zero (0) trades were recorded in this publishing window, receiving 0% weightage.
  
  
• Thirteen (13) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades. Hence, this category was accorded 100% weightage.
  
  

Previously, NMDC conducted another auction for 48,000 t of iron ore on 26 November from its Donimalai mines. At the auction, 12,000 t of lumps (10-40 mm, Fe 59%) were booked at INR 4,738/t ($56/t) against the base price of INR 4,728/t ($56/t), while 36,000 t of fines (Fe 59%) were booked at INR 4,025/t ($48/t) against the base price of INR 4,015/t ($48/t). Prices are on FOR, ex-stockpile/mines basis, including royalty, DMF, and NMET.

However, sponge iron (CDRI) prices in Bellary, Karnataka, fell around INR 450/t ($5/t) w-o-w. The decline was because of market volatility, which made buyers cautious. With market participants reluctant to make significant commitments, there was a noticeable decrease in buying.

Karnataka iron ore sales scenario (22-28 November, 2024)

Outlook

Domestic low-grade iron ore prices are expected to be volatile, with uncertainty in market movements. However, sentiments will likely improve amid a recovery in the steel and sponge iron segments, a source told BigMint.