Karnataka: Low-grade iron ore prices rise marginally tracking NMDC hike

Domestic low-grade iron ore fines (Fe 57%) prices increased this week in Karnataka's Bellary. Shortage of ore in the region, hike in NMDC's base prices followed by active participation in the miner's Donimalai auction, and high bids in recent auctions kept low-grade ore prices supported, SteelMint notes.

The weekly index for low-grade iron ore fines (Fe 57%) stands at INR 3,550/tonne (t) ex-mines Bellary, an increase of INR 100/t, w-o-w.

"Although low-grade ore prices have not increased much after NMDC's price hike, shortage of material continues to support prices. High-grade iron ore prices have witnessed a better hike this time," a Karnataka-based miner said.

NMDC Karnataka announced list prices of iron ore on 14 October from the Donimalai mines. Revised prices for fines (-10mm, Fe 59%) are at INR 3,058/t, and lumps (10-40mm, Fe 59%) at INR 3,235/t, an increase of INR 362/t and INR 345/t, respectively. Prices include royalty, DMF and NMET.

Followed by the price revision, an auction from Donimalai was conducted on 16 October for 380,000 t of iron ore in which 44,000 t of lumps (10-40 mm, Fe 54-59%) were booked at INR 3,498-4,255/t against the base price of INR 2,378-3,235/t and 336,000 t of fines (Fe 54-59%) were booked at INR 2,307-3,528/t against the base price of INR 2,257-3,058/t. Bid prices for lumps and fines rose by INR 1,130/t and INR 470/t, respectively.

"Shortage of low-grade material due to auctioned mines not getting necessary clearances and delayed paperwork as well as noticeable hike in bid prices in recent auctions have driven iron ore prices higher," a Bellary-based source mentioned.

"Although the majority of miners are offering material at higher prices, some auctions/deals were concluded at comparatively lower price levels. Owing to the arrival of iron ore fines from Odisha and the nearby states, some mills are trying to keep Karnataka prices in check," a source said.

Rationale:

• One (1) trade of around 4,000 t was recorded in this publishing window via the auction route; however, it was not taken into consideration and accorded 0% weightage.
  
  
• Ten (10) offers and indicative prices were reported, with eight (8) being considered as T2 trades and receiving 100% weightage.
  
  

Karnataka iron ore sales scenario (12-19 Oct'23)

Outlook

Domestic low-grade iron ore prices in Karnataka are expected to remain supported in the near term amid tight supply of low-grade material in the region.