Karnataka: Low-grade iron ore prices remain stable after NMDC price roll over

• NMDC rolls over iron ore prices
  
  
• PDSU miner's iron ore auction gets active response
  
  
• Recovery in sponge iron market provides support
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained flat this week in Karnataka's Bellary region. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood unchanged at INR 3,100/tonne (t) ($37/t) ex-mines Bellary (excluding taxes), stable w-o-w.

National Mineral Development Corporation's (NMDC's) decision to roll over iron ore prices, along with need-based procurement and material shortages, has helped sustain domestic prices. Additionally, the company's recent iron ore auctions at its Donimalai and Kumaraswamy mines garnered premium bids.

Similarly, the Fe 62% fines index was assessed at INR 5,000/t ($59/t) ex-mines Bellary, including taxes. However, a few higher offers were reported at INR 5,200-5,400/t ($62-64/t), attributed to demand-supply mismatch in the region. Despite higher offers, no deals were concluded at these levels, as buyers have yet to accept increased prices. Meanwhile, the arrival of few import cargoes at southern port has disrupted domestic trade.

A major buyer from the region said, "Import bookings were done under long term contracts for a Maharashtra-based plant. Since there is some supply-demand mismatch in Karnataka, a few vessels were diverted to Krishnapatnam port".

Two Australian vessels of low-grade fines (Fe 57%) were reported to have been arrived at Krishnapatnam Port, vessel lineup data maintained with BigMint shows. The cargoes comprised of over 350,000 t of iron ore and has been booked by a southern India-based integrated steel mill.

Rationale:

• Zero (0) trade was recorded in this publishing window, receiving 0%% weightage.
  
  
• Twelve (12) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades. Hence, accorded with 100% weightage.
  
  

Market highlights:

• NMDC iron ore prices unchanged, auction receives active participation: NMDC Karnataka announced list prices of iron ore on 5 November, 2024 from its Donimalai mines. revised prices of fines (-10 mm, Fe 59%) and lumps (10-40 mm, Fe 59%) stand unchanged at INR 4,015/t ($47/t) and INR 4,728/t ($56/t), respectively. Meanwhile, miner's iron ore auction from the Donimalai mines on 5 November, 2024 witnessed total bookings of 48,000 t. 36,000 t of fines (Fe 59%) were booked at INR 4,055/t ($48/t) against base price of INR 4,015/t ($48/t) while 12,000 t of lumps (10-40 mm, Fe 59%) were booked at INR 4,828/t ($57/t) against base price of INR 4,728/t ($56/t).
  
  

Another auction held on 5 November, 2024, at NMDC's Kumaraswamy mines saw the entire 220,000 t quantity booked, with premium bids received. 80,000 t lumps (10-40 mm, Fe 59.49-64.24%) booked at INR 5,203-6,680/t ($62-79/t) against base prices of INR 4,653-5,840/t ($55-69/t) while 140,000 t fines (Fe 63.12-63.80%) booked at INR 5,492-5,520/t ($65/t) against base prices of INR 4,622-4,765/t ($55-56/t).

• Bellary C-DRI prices rebound w-o-w: Sponge iron (CDRI) prices in Bellary, Karnataka rose around INR 700/t ($8/t) w-o-w. The improvement in semi-finished prices has kept sponge prices supported, sources informed BigMint.
  
  

Karnataka iron ore sales scenario (30 October-7 November, 2024)

Outlook

Domestic low-grade iron ore prices are likely to remain volatile, with uncertainty in price movements. However, market sentiments are expected to improve amid recovery in steel and sponge iron sentiments in the region, a source told BigMint.