Karnataka: Iron ore prices inch up w-o-w as market awaits NMDC auction outcome

• Miners expect further price hikes
  
  
• Muted CDRI market raises concern
  
  

India's domestic low-grade iron ore fines (Fe 57%) prices remained supported in Bellary, Karnataka, with BigMint's weekly index for the same experiencing a marginal hike of INR 50/tonne (t) ($1/t) w-o-w to INR 2,900/t ($34/t) ex-mines (excluding taxes).

Similarly, the Fe 62% fines index also increased by INR 50/t ($1/t) to INR 4,950/t ($59/t) ex-mines Bellary, including taxes.

According to sources, the stability in domestic iron ore prices stemmed from further expectations of price increases, as the market awaited the results of the latest iron ore auctions from the National Mineral Development Corporation (NMDC).

On 24 October, NMDC Kumaraswamy conducted an auction for 100,000 t of lumps (10-40 mm, Fe 59.58-64.47%) and 148,000 t of fines (Fe 54.89-63.91%). The following day, 25 October, NMDC Donimalai will auction 36,000 t of fines (Fe 59%) and 12,000 t of lumps (10-40 mm, Fe 59%).

Echoing the above sentiments, a Bellary-based miner noted, "NMDC Karnataka has increased the base price for today's iron ore auction to approximately INR 700/t ($8/t). The market direction will become clearer following the auction."

Additionally, some miners in Karnataka raised their offers for low-grade fines in response to recent transactions that closed at elevated prices.

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.
  
  

Meanwhile, the weakening sponge iron (CDRI) market in Bellary has become a matter of concern for local market players. Sponge iron prices in Bellary plunged by INR 950/t ($11/t) w-o-w on 24 October, impacted by sluggish movements in the semi-finished and finished steel segments. This trend, in turn, led to further reductions in offers.

Karnataka iron ore sales summary (18-24 October 2024)

Outlook

Domestic low-grade iron ore offers are expected to rise in the coming week due to expectations of price hikes. However, weak sentiments in the sponge iron CDRI market, where prices are trending downward, may weigh on offers for low-grade ore.