Karnataka: Low-grade iron ore prices remain stable as NMDC rolls over tags

• NMDC's iron ore auctions witness 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 the same (Fe 57%) stood unchanged w-o-w at INR 3,100/tonne (t) ($37/t) ex-mines Bellary (excluding taxes).

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

Besides, the Fe 62% fines index was assessed at INR 5,150/t ($61/t) ex-mines Bellary, including taxes. However, some offers were noted at higher levels, that is INR 5,200-5,300/t ($62-63/t), due to a demand-supply mismatch in the region. However, no deals were concluded at these offers, as buyers are yet to accept the increased prices. Meanwhile, the arrival of few import cargoes at southern ports has disrupted domestic trade.

Additionally, several market participants were absent this week. One such miner informed BigMint, "We are currently prioritising the dispatch of our previous orders due to their large volume, so we have decided not to make any new offers at this time."

Rationale

• Zero (0) trades were recorded in this publishing window, receiving 0% weightage.
  
  
• Fourteen (14) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades. Hence, this category was accorded 100% weightage.
  
  

Factors supporting low-grade iron ore prices

• NMDC's auctions see active participation: NMDC Karnataka's list prices of iron ore fines (-10 mm, Fe 59%) and lumps (10-40 mm, Fe 59%) stood at INR 4,015/t ($48/t) and INR 4,728/t ($56/t), respectively, for the Donimalai auction on 20 November 2024. List prices remained unchanged from the previous price revision on 5 November. The auction witnessed bookings of 48,000 t: 36,000 t of fines (Fe 59%) were booked at INR 4,075/t ($48/t) against the base price of INR 4,015/t ($48/t), while 12,000 t of lumps (10-40 mm, Fe 59%) were booked at INR 4,888/t ($58/t) against the base price of INR 4,728/t ($56/t).
  
  

Another auction, held on 19 November 2024 at NMDC's Kumaraswamy mines, saw the entire 324,000 t quantity booked, with premium bids received: 144,000 t of lumps (10-40 mm, Fe 61.41-63.99%) were booked at INR 5,333-6,688/t ($63-79/t) against the base prices of INR 5,133-5,778/t ($61-68/t), while 180,000 t of fines (Fe 54.89-64.42%) were booked at INR 2,889-5,835/t ($34-69/t) against the base prices of INR 2,889-4,815/t ($34-57/t).

• Bellary C-DRI prices rebound on improved bookings: Sponge iron (CDRI) prices in Bellary, Karnataka, rose around INR 100/t ($1/t) w-o-w. Prices moved upward, as positive sentiments floated after the Odisha Mining Corporation's iron ore auction. Increased inquiries were heard in the market, supported by active bookings at a higher price range. As a result, transaction volumes rose steadily, sources informed BigMint.
  
  

Karnataka iron ore sales scenario (14-21 November 2024)

Outlook

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