Karnataka: Low-grade iron ore prices remain stable w-o-w, trade muted

• Labour agitation at NMDC Donimalai raises supply concerns
  
  
• Domestic realisations better than exports
  
  
• NMDC Kumaraswamy auction fetches premiums
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained supported 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.

Supply concerns amid NMDC Donimalai labour strike, premium bids in e-auctions along with supportive sentiments from low-grade fines exports have kept low-grade iron ore offers supported, BigMint notes.

"NMDC's iron ore production and dispatches continue to remain hampered since for the second week running due to a labour strike. Hence, offered volumes from the miner have dropped raising supply concerns," said a Bellary-based buyer.

A Bellary-based miner told BigMint, "Currently, we are getting better price realisation in the domestic market amid supply shortage amid active demand. Hence, we are not offering in the export market".

Rationale:

• No trade was recorded in this publishing window, hence, accorded with 0% weightage.
  
  
• Nineteen (19) offers and indicative prices were reported, out of which sixteen (16) were considered as T2 trades receiving a 100% weightage.
  
  

Factors supporting offers:

• NMDC iron ore auction fetches premium bids: NMDC held an auction for 224,000 t of iron ore on 22 May from its Kumaraswamy mines. As per sources, 48,000 t lumps (10-40 mm, Fe 62.01%) was booked at INR 5,825/t ($70/t) against the base price of INR 4,965/t ($60/t) and 176,000 t fines (Fe 58.92-63.44%) was booked at INR 3,552-5,394/t ($43-65/t) against the base price of INR 3,542-4,444/t ($43-53/t). Notably, bid prices for lumps and fines increased by INR 860/t ($10/t) and 950/t ($11/t), respectively. Prices are on ex-mines basis, including royalty, DMF and NMET.
  
  
• Low-grade export index rises w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index rose by around $3.5/t w-o-w to $68.5/t FOB east coast on 23 May. As per market sources, low-grade fines export prices remained supported amid active demand after the positive macroeconomic policy changes by the Chinese government. "Prices have remained supported. Export index also witnessed recovery. However, no domestic trade was heard this week," said a Bellary-based miner.
  
  
• Pellet prices stable in Bellary: Pellet prices in Bellary, Karnataka, remained supported w-o-w at INR 10,550/t ($127/t) exw. Stability in sponge iron (PDRI) prices have supported pellet prices. However, lower trading activities were witnessed in the region.
  
  

Karnataka iron ore sales scenario (17-23 May, 2024)

Outlook

Domestic low-grade iron ore prices are expected to remain supported amid supply concerns as relative demand is on the higher side.