Karnataka: Domestic iron ore prices increase w-o-w following NMDC price hike

• NMDC hikes iron ore prices by INR 460/t ($5/t)
  
  
• Auctions receive active response
  
  
• Miners anticipate further price rise
  
  

Domestic low-grade iron ore fines (Fe 57%) prices increased this week in Karnataka's Bellary region. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 2,800/tonne ($33/t) ex-mines Bellary (excluding taxes), marking a rise of INR 100/t ($1/t) w-o-w. Similarly, the Fe 62% fines index was assessed at INR 4,850/t ($58/t) ex-mines Bellary, including taxes, up by INR 100/t ($1/t) w-o-w. However, some higher offers were noted at INR 5,000/t ($60/t) due to limited supplies of high-grade ore. No transactions occurred at these higher prices, as buyers have not yet agreed to the increases.

The National Mineral Development Corporation (NMDC) has announced revised list prices for iron ore auctions from the Donimalai mines. Post-revision, fines (-10 mm, Fe 59%) are priced at INR 3,698/t ($44/t), up by INR 398/t ($5/t), while lumps (10-40 mm, Fe 59%) are at INR 4,268/t ($51/t), up by INR 459/t ($5/t). Prices include royalty, DMF, and NMET. A major Bellary-based seller stated, "This NMDC price hike will be reflected in private miners' offers in the coming 10-15 days."

In similar vein, a buyer from the region said, "Private miners might increase prices further by INR 300/t looking towards the current scenario."

Rationale:

• One (1) trade of 80,000 t was recorded in this publishing window, receiving a 50% weightage.
  
  
• Thirteen (13) offers and indicative prices were reported, out of which twelve (12) were considered as T2 trades. Hence, accorded a 50% weightage.
  
  

Factors supporting Karnataka's low-grade domestic prices:

• Iron ore fines export index rises by $6.5/t w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by around $6.5/t w-o-w to $67/t FOB east coast on 3 October, 2024. Indian lower-grade fines prices on the seaborne market rose this week following the hike in global spot, future prices with resumption of production in northern China. However, the Chinese market has been quiet for the past two to three days due to the Golden Week holidays.
  
  
• NMDC Donimalai auction fetches premium bids: On 3 October, 2024, NMDC held an auction for 48,000 t of iron ore from its Donimalai mines. A total of 12,000 t of lumps (10-40 mm, Fe 59%) were sold at INR 4,628/t ($55/t), above the base price of INR 4,268/t ($51/t). Meanwhile, 36,000 t of fines (Fe 59%) were booked at INR 3,708/t ($44/t), compared to the base price of INR 3,698/t ($44/t). Notably, bid prices of lumps increased by INR 360/t ($4/t).
  
  
• Bellary C-DRI prices rise w-o-w: Sponge iron (CDRI) prices in Bellary, Karnataka witnessed a significant increase of around INR 1,250/t ($15/t) w-o-w. The improvement in semi-finished prices has kept sponge prices supported, sources informed BigMint.
  
  

Karnataka iron ore sales scenario (26 September-3 October, 2024)

Outlook

Domestic low-grade iron ore prices are expected to rise in the near term, driven by anticipated price hikes from miners amid regional supply concerns. This trend follows NMDC's recent price increase announcement.