Karnataka: Low-grade iron ore prices remain unchanged, market awaits NMDC price revision

• Supply concerns support offers
  
  
• Active restocking seen by mills
  
  

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 3,100/tonne (t) ($37/t) ex-mines Bellary (excluding taxes), stable, w-o-w.

Supply concerns amid monsoon and active restocking by steel and pellet makers to keep operations running smoothly, along with supportive sentiments from the sponge market, kept offers in the Bellary region firm, BigMint observed.

Meanwhile, NMDC has announced that its Kumaraswamy mines in Karnataka will auction 224,000 t of iron ore on 3 August, 2024. Of the total quantity, 176,000 t are fines (Fe 59.5-64.42%) and 48,000 t are lumps (10-40 mm, Fe 64.042%). Prices are yet to be declared by the miner.

Rationale:

• One (1) trade of 80,000 t was recorded in this publishing window and accorded 50% weightage.
  
  
• Sixteen (16) offers and indicative prices were reported, out of which fifteen (15) were considered as T2 trades, receiving 50% weightage.
  
  

What factors supported low-grade offers?

• Bellary CDRI prices up w-o-w: Sponge iron (CDRI) prices in Bellary, Karnataka rose by INR 250/t ($3/t) w-o-w. Prices increased as steel prices up-trended. However, demand remained very limited with offers on the higher side.
  
  
• Low-grade export offers rise w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $1.5/t w-o-w to $58/t FOB east coast on 1 August, 2024. The Indian fines export market remained supportive this week with some successful transactions for lower-grade fines in the seaborne market. However, sources said that only miners received decent bids while traders struggled to sell their material in the overseas market. Sources added that fines performed comparatively better in the export market against pellets in the last few days. The discount for the single mine material has been narrowed which supported miners' deals while other exporters kept a cautious stance to sell their material and waited for an improvement in the global market.
  
  

Karnataka iron ore sales scenario (25 July-1 August, 2024)

Outlook

Domestic low-grade iron ore prices are likely to remain volatile, with uncertainty in price movement. However, market sentiments are expected to improve post-monsoon in the region, one of the buyers told BigMint. "Trades will pick up further post-monsoon as miners will start production actively which will improve the supply side," the buyer said. Meanwhile, the market is awaiting NMDC's price revision for better clarity.