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Karnataka: Low-grade iron ore prices stay firm amid supportive market sentiments

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Fines/Lumps

BigMint Bureau

210 Reads

18 Apr 2024, 19:58 IST

Karnataka: Low-grade iron ore prices stay firm amid supportive market sentiments

Miners resume offers with onset of new fiscal, fresh ECs

Hike in sponge prices, material shortage support prices

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 3,050/t ($37/t) ex-mines Bellary (excluding taxes). Prices were also heard at a higher INR 3,700/t ($44/t), excluding taxes. However, no trades were reported at the elevated price levels.

Sharp hike in sponge (CDRI) and low-grade export prices and shortage of material in the region have kept low-grade offers supported, BigMint noted. Meanwhile, trades have gained momentum with miners kickstarting their productions with fresh ECs in the current fiscal (FY'25).

"Hike in sponge, pellet and finished steel prices in the preceding weeks along with material shortage have kept raw-material prices supported. In the meantime, auctions are also getting concluded at premium prices which might result in increase in prices in the near-term," said a Bellary-based miner.

Rationale:

Two trades amounting to 150,000 t (50,000 t via e-auction) were recorded in this publishing window and were accorded 50% weightage.

Thirteen (13) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades receiving 50% weightage.

Factors supporting low-grade offers:

Hike in sponge CDRI prices w-o-w: BigMint's sponge CDRI prices (FeM 80%) in the Bellary region witnessed a significant increase of around INR 1,450/t ($17/t) to stand at INR 29,200/t ($349/t) on 18 April, 2024. Improved buying activities with a significant surge in bookings followed by hike in finished steel segments have pushed up prices.

Low-grade export prices up by $9/t w-o-w: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased sharply by around $9/t w-o-w to $65/t FOB east coast on 18 April, 2024. "Recovery in the export index post-Chinese holidays will surely support domestic low-grade prices as well," said another miner from the region." Iron ore fines prices in the seaborne market recovered this week amid improvement in global iron ore prices and DCE iron ore futures post-the Chinese government's announcement for the domestic steel market.

Karnataka iron ore sales scenario (12-18 April, 2024)

Outlook

Domestic low-grade iron ore prices are expected to remain supported amid the improving export index and at the same time, the fresh ECs from FY'25 are expected to improve the supply side.