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Karnataka iron ore prices fall to over 4-month low on declining export prices

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Fines/Lumps

BigMint Bureau

279 Reads

29 Feb 2024, 19:34 IST

Karnataka iron ore prices fall to over 4-month low on declining export prices

Falling export index weigh on domestic prices

Material availability is a constraint as few miners exhausted

Trades remained on lower side

Domestic low-grade iron ore fines (Fe 57%) prices witnessed a drop this week in Karnataka's Bellary. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,400/t ($41/t) ex-mines Bellary, a w-o-w fall of INR 200/t ($2/t). Notably, prices are hovering at over four-months low as the same levels were reported in October, 2023.

Significant fall in low-grade export prices weighed on domestic prices. BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased sharply by $7/t w-o-w to $74/t FOB east coast on 29 February, 2024. The export market for iron ore fines remained sluggish this week as bids from buyers' side remained lower against the sellers' offers. On the contrary, participants in the overseas market kept their offers firm and did not sell the material at the downtrend market flow.

"Iron ore demand in the export market is slow affecting the domestic prices. Meanwhile, demand-supply mismatch persists in the market," mentioned a Bellary-based buyer.

Lower trades amid non-availability of material owing to some miners' ECs getting exhausted towards the fiscal year 2024 (FY'24)-end weighed on Karnataka's low-grade iron ore market.

"Shortage of the raw material is there in the market resulting in no active offers. Also, no deals were heard recently," a Bellary-based miner told BigMint.

Meanwhile, NMDC Karnataka had an iron ore auction from Donimalai mines on 21 February, 2024. 20,000 t fines (Fe 57%) got booked at base price of INR 3,456/t ($42/t) while 4,000 t lumps (10-40 mm, Fe 57%) got booked at INR 3,877/t against the base price of INR 3,577/t ($43/t). Noticeably, bid price for lumps were higher against base price by INR 300/t ($4/t). Prices are on ex-mines basis and include royalty, DMF and NMET.

Rationale:

One (1) trade of 20,000 t was recorded via auction but was not taken into consideration and accorded with 0% weightage.

Fourteen (14) indicative prices were reported, out of which eleven (11) were considered as T2 trades receiving 100% weightage.

Karnataka iron ore sales scenario (21-29 Feb'24)

Outlook

Domestic low-grade iron ore prices and trade in Karnataka are expected to remain under pressure due to soft market trends amid fiscal year-end and bearish export market sentiment.