Karnataka: Iron ore fines prices rise w-o-w on higher bids in recent auctions

• NMDC hikes iron ore prices by INR 460/t ($5/t)
  
  
• NMDC's recent auction fetches active response
  
  

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 3,100/tonne ($37/t) ex-mines Bellary (excluding taxes), marking a rise of INR 200/t ($2/t) w-o-w.

The Fe 62% fines index was assessed at INR 5,000/t ($59-60/t) ex-mines Bellary, including taxes, up by INR 50/t ($0.5/t) w-o-w.

Domestic prices received support from regional iron ore scarcity, which led to the upward revision of base prices at NMDC's recent Donimalai auction, BigMint learned from sources. NMDC has announced revised list prices for iron ore auctions from the Donimalai mines. Post-revision prices for fines (-10 mm, Fe 59%) are at INR 4,015/t ($48/t), up by INR 317/t ($4/t), while lumps (10-40 mm, Fe 59%) prices are at INR 4,728/t ($56/t), up by INR 460/t ($5/t). Prices include royalty, DMF and NMET.

However, some miners have chosen to hold their offers due to the Diwali festival. This decision was triggered by weak demand in the sponge iron and finished steel markets before Diwali. The current market dynamics are forcing miners to reassess their positions.

NMDC Karnataka has raised its iron ore offers following a price hike announcement by the miner in Chhattisgarh.

A Bellary-based miner said, "We expect the impact of NMDC's price hike to be felt in November, especially with the ongoing festivals influencing market dynamics."

Rationale

• No trade was recorded in this publishing window. Hence, the T1 category was accorded 0% weightage.
  
  
• Eleven (11) offers and indicative prices were reported, out of which nine (9) were considered as T2 trades, receiving 100% weightage.
  
  

Factors supporting Karnataka's low-grade ore prices:

• Iron ore fines export index rises by $4/t w-o-w: BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $4/t w-o-w to $64/tonne (t) FOB east coast, India, on 30 October. After a long hiatus sellers successfully concluded deals in the export market. However, the Chinese market has been quiet over the past two to three days due to the Golden Week holidays.
  
  
• NMDC Kumaraswamy auction attracts premium bids: On 24 October, NMDC conducted an auction for 248,000 t of iron ore from its Kumaraswamy mines. A total of 100,000 t of lumps (10-40 mm, Fe 59.58-64.47%) were booked at INR 5,215-6,387/t against base prices of INR 4,605-5,897/t and 148,000 t of fines (Fe 54.89-63.91%) were booked at INR 2,919-5,478/t against base prices of INR 2,889-4,788/t. Notably, bid prices of lumps and fines were higher by INR 750/t and 690/t, respectively.
  
  

Karnataka iron ore sales scenario (25-30 October, 2024)

Outlook

Domestic low-grade iron ore prices are likely to remain volatile following the recent NMDC price hikes and ongoing shortage of iron ore in the region. Market participants are closely monitoring any potential price corrections post-Diwali, which could further influence market dynamics in the weeks ahead.