Karnataka: Low-grade iron ore index remains stable w-o-w

• Stability in export prices supports domestic market
  
  
• Onset of monsoon to put further pressure on prices
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained unchanged this week in Karnataka's Bellary. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,300/t ($40/t) ex-mines Bellary (excluding taxes), stable w-o-w. Supportive sentiments from the low-grade export market have kept domestic prices firm, BigMint notes.

However, market sentiments in the region have been bearish as trades have remained muted amid the onset of monsoons in the region. A major miner said, "Many auctions conducted are seeing material being left unsold. The little sales taking place is only need-based procurement. Also, the bidding price range is minimal when compared to base prices".

Another miner from the region told BigMint: "The monsoons have started in the region which is going to impact iron ore production volumes in the coming time".

A Chitradurga-based miner said: "We are not offering currently. Only SMIORE and RPC are the ones offering low-grade ore in the market. NMDC's base price notification for its latest auction has kept offers supported".

Rationale:

• No trade was recorded in this publishing window, hence, accorded 0% weightage.
  
  
• Thirteen (13) offers and indicative prices were reported, out of which eleven (11) were considered as T2 trades receiving a 100% weightage.
  
  

Why low-grade ore prices remain supported?

• NMDC's auction receives active participation: NMDC conducted an auction for 44,000 t of iron ore on 24 June from its Donimalai mines. The entire quantity of 8,000 t of lumps (10-40 mm, Fe 59%) was booked at the base price of INR 4,651/t, while 36,000 t of fines (Fe 59%) was booked at INR 4,121/t against the base price of INR 4,101/t. Another 204,000 t of iron ore auction was concluded from Kumaraswamy mines on 24 June. In the auction, 108,000 t lumps (10-40 mm, Fe 60.86-63.79%) was booked at INR 4,919-5,929/t against the base price of INR 4,909-5,629/t while 96,000 t fines (Fe 62.78-63.57%) was booked at INR 4,667-5,105/t against the base price of INR 4,647-4,815/t. Prices are on ex-mines basis, including royalty, DMF and NMET.
  
  
• Supportive sentiments from low-grade export market: Indian low-grade fines prices remained rangebound in the seaborne market, with improved trading activity seen compared to last week. Buyers showed interest in Indian material at lower prices, Although several deals were under negotiations, none were concluded due to sellers asking for comparatively higher prices.
  
  

Karnataka iron ore sales scenario (21-27 June, 2024)

Outlook

Domestic low-grade iron ore prices may come under pressure in the coming days, with the monsoon advancing and trading witnessing an inevitable slowdown.