India: Low-grade iron ore prices stay supported w-o-w amid supply concerns
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- Low-grade export market sees recovery
- NMDC Donimalai auction sees active response
Domestic low-grade iron ore fines (Fe 57%) prices remained stable in Karnataka's Bellary. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood unchanged w-o-w at INR 2,650/tonne (t) ($32/t) ex-mines Bellary(excluding taxes). The Donimalai auction of the National Mineral Development Corporation (NMDC) witnessed competitive bidding, and a recovery in the low-grade export market and supply concerns amid monsoons have kept prices supported, BigMint observed. Meanwhile, a few miners stayed out of the market, as they focused on completing previous orders.
"Ore availability is tight because of the monsoon. This was reflected in NMDC's Donimalai auction, which fetched high bids over the set base price," said a major Bellary-based buyer.
Along the same lines, a Bellary-based seller told BigMint, "Miners are not ready to lower offers from this level, as concerns abound over supply. NMDC also received competitive bidding, which went up to current market levels."
Rationale:
- One (1) trade of 15,000 t was recorded in this publishing window and, hence, accorded 50% weightage.
- Fourteen (14) offers and indicative prices were reported, out of which twelve (12) were considered as T2 trades, receiving 50% weightage.
Factors supporting low-grade prices:
- NMDC's iron ore auction fetches active response: NMDC held an iron ore auction from the Donimalai mines, Karnataka, on 20 August 2024. While 32,000 t of fines (Fe 59%) were booked at INR 3,450/t against the base price of INR 3,300/t, 12,000 t of lumps (10-40 mm, Fe 59%) were booked at INR 4,109/t against the base price of INR 3,809/t. Prices included royalty, DMF, and NMET. Notably, bid prices for fines and lumps were higher by INR 150/t and INR 300/t.
- Low-grade export prices rebound w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $5/t w-o-w to $59/t FOB East Coast on 29 August 2024. Iron ore fines prices showed some improvement in the seaborne market over the week, but no deals were heard from the Indian sellers' end, as buyers remained absent. Meanwhile, exporters are eager to sell their material but are holding offers amid low buying interest from Chinese players.
Karnataka iron ore sales scenario (22-29 August 2024)
Outlook
Domestic low-grade iron ore prices are expected to remain supported amid ongoing seasonal concerns and the absence of a few miners from the market.