Karnataka: Iron ore prices remain stable w-o-w amid price hike expectations

• NMDC Donimalai auction fetches premium bids
  
  
• Market expects further price hike
  
  
• Weak sentiments in pellet, sponge market raise concerns
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained supported in Karnataka's Bellary. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 2,850/tonne (t) ($34/t) ex-mines Bellary (excluding taxes), unchanged, w-o-w.

Similarly, the Fe 62% fines index was assessed stable, too, at INR 4,900/t ($58/t) ex-mines Bellary, including taxes. Domestic iron ore prices remained stable, amid expectations of price increases following the recent NMDC auction of iron ore from the Donimalai mines, which attracted premium bids, according to BigMint. In the same line, a Bellary-based miner mentioned, "Prices are expected to rise further, as the active bookings from the NMDC auction, following the miner's price increase, will likely be reflected by next week."

Additionally, some miners in Karnataka have already 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, accorded 0% weightage.
  
  
• Fourteen (14) offers and indicative prices were reported, out of which twelve (12) were considered as T2 trades receiving a 100% weightage
  
  

NMDC's iron ore auction from the Donimalai mines, Karnataka, on 16 October, 2024 witnessed bookings for 76,000 t. 64,000 t fines (Fe 59%) got booked at INR 3,778/t ($45/t) against the base price of INR 3,698/t ($44/t) while 12,000 t lumps (10-40 mm, Fe 59%) got booked at INR 4,428/t ($53/t) against the base price of INR 4,268/t ($51/t). Prices include royalty, DMF, and NMET. Notably, bid prices for fines and lumps were higher by INR 80/t ($1/t) and INR 160/t ($2/t), respectively.

Meanwhile, the market is eagerly awaiting the outcomes of few auctions from major miners. 16,000 t fines (Fe 54.10-56.50%) from SMIORE on 18 October, 2024 with floor prices set at INR 2,860-3,320/t ($34-39/t) while KSMCL is going to auction around 140,000 t fines (Fe 62.22-63.31%) from Subbrayanahalli mines on 25 October, 2024. Floor prices are set at INR 3,733-3,799/t ($44-45/t). SMIORE's prices include taxes, while KSMCL's excludes.

Karnataka iron ore sales summary (10-17 October, 2024)

Outlook

Domestic low-grade iron ore prices are anticipated to rise in the coming week due to expectations of price hikes from market participants. However, the ongoing weak sentiment in the pellet and sponge CDRI markets, where prices are trending downward, raises some concerns.