Karnataka: Iron ore prices remain unchanged as market awaits NMDC auction outcome

• Market lacks price clarity
  
  
• Tight supply expected to support prices
  
  

India's domestic low-grade iron ore fines (Fe 57%) prices remained stable in Bellary, Karnataka, with BigMint's weekly index remaining unchanged w-o-w at INR 3,100/tonne (t) ($37/t) ex-mines (excluding taxes).

Similarly, the Fe 62% fines index was assessed at INR 5,200/t ($61/t) ex-mines Bellary, including taxes, stable w-o-w amid supply-demand disparities.

According to sources, miners maintained stable pricing, with no adjustments in offers. Market activity was subdued, with no active trades. Presently, miners are prioritising dispatches of older inventory rather than initiating fresh sales, signalling a temporary market pause as they focus on clearing existing stocks. A source informed BigMint that low-grade material is in limited supply in the merchant market, as miners do not have material of the required grade.

Meanwhile, the market is awaiting the results of the latest iron ore auctions from the National Mineral Development Corporation (NMDC).

On 7 December, NMDC has scheduled two auctions from its Donimalai and Kumaraswamy mines. The miner will auction 96,000-t of iron ore from Donimalai mines comprising 72,000-t fines (Fe 59%) and 24,000-t lumps (10-40 mm, Fe 59%). Another auction from Kumaraswamy will auction 256,000 t of iron ore. Of the total quantity, 176,000 t are fines (Fe 54.60-62.07%) and 80,000 t lumps (10-40 mm, Fe 56.80-62.79%). Prices which are yet to be declared by the company will include royalty, DMF & NMET.

Echoing the above sentiments, a Bellary-based miner noted, "We are waiting for NMDC's upcoming auctions. Prices have remained stable as NMDC kept it unchanged in its previous auctions."

Rationale:

• No trade was recorded in this publishing window. Hence, the T1 category was accorded 0% weightage.
  
  
• Fourteen (14) offers and indicative prices were reported, out of which eleven (11) were considered as T2 trades, receiving 100% weightage.
  
  

Meanwhile, the recovering sponge iron (CDRI) market in Bellary has also provided support to low-grade iron ore prices. Sponge iron prices in Bellary increased by INR 200/t ($2/t) w-o-w on 5 December, driven by market volatility and prevailing trends in neighbouring markets.

Karnataka iron ore sales summary (29 November-5 December, 2024)

Meanwhile, iron ore e-auction sales volumes in Karnataka increased by around 13% m-o-m to 1.10 million tonnes (t) in November, against 969,645 t in October, data maintained with BigMint shows. Of the total volumes sold in the month under review, fines accounted for 594,800 t (up 25% m-o-m), while lumps constituted 504,100 t (up 2% m-o-m).

Outlook

Domestic low-grade iron ore prices are expected to be volatile, with uncertainty in market movements. However, the market will likely gain price clarity post NMDC's auction results.