Karnataka: Domestic low-grade iron ore exports market remains active on subdued domestic sales

• Miners preferring exports market
  
  
• Domestic market under pressure on active exports
  
  
• However, shortage of material in domestic market has supported prices
  
  

Karnataka's iron ore market is undergoing notable changes in iron ore sales dynamics. Miners in the region are opting for the export market to sell iron ore, finding better realisations compared to the domestic market, as noted by SteelMint.

"No major change has been witnessed in domestic low-grade market in terms of prices and offers. Limited offering prevails in the domestic market by key players as major volume of low-grade is being allocated for exports", mentioned a Bellary-based miner.

"Although prices have remained firm owing to supportive export market, but no active trades have been witnessed in recent times", another miner from Bellary said to SteelMint.

Another source from Bellary mentioned, "Shortage of low-grade in the domestic market is the reason why auctions are receiving higher bids these days".

Meanwhile, domestic low-grade iron ore fines (Fe 57%) prices remained unchanged this week in Karnataka's Bellary. SteelMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 4,000/t ($48/t) ex-mines Bellary, stable, w-o-w.

Rationale:

• One (1) trade was recorded in this publishing window but was not taken into consideration. Hence, accorded 0% weightage.
  
  
• Ten (10) offers and indicative prices were reported, with nine (9) of them being considered as T2 trades and receiving 100% weightage.
  
  

Why miners are preferring export market?

• Supportive global iron ore prices: Iron ore (Fe 62%) fines spot prices increased significantly by around $6/t w-o-w to $141/t CFR China on 27 December, 2023. According to market sources, the purchasing activity weakened slightly on the particular day when certain steel mills had almost completed re-stocking seaborne cargos ahead of the Lunar New Year holidays. Demand for medium-grade fines was decent as Chinese steel mills are facing negative margins in steel production amidst escalating raw material costs.
  
  
• Low-grade export prices rise w-o-w: SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $1/t w-o-w to $93/t FOB east coast on 28 December, 2023. Iron ore offers were up against last one week amid active deals of the east coast and southern India region for January shipment. As per reports, it is quite probable that steel mills will re-stock their inventory following the Lunar New Year holiday.
  
  

Karnataka iron ore sales scenario (22-28 Dec'23)

Outlook

Domestic low-grade iron ore prices in Karnataka are expected to remain supported in the near term amid export price rally and shortage of material in the region. However, trades might remain under pressure.