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Karnataka: Low-grade iron ore prices stay supported post-NMDC's price revision

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Fines/Lumps

BigMint Bureau

181 Reads

2 May 2024, 19:22 IST

Karnataka: Low-grade iron ore prices stay supported post-NMDC's price revision

NMDC announces base price hike

Export index recovery supports domestic prices

Market awaits Donimalai auction results

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 3,100/t ($37/t) ex-mines Bellary (excluding taxes), a marginal w-o-w increase of INR 100/t ($1/t). NMDC's recent price hike announcement along with supportive sentiments from export and sponge iron (CDRI) market have kept low-grade iron ore prices in Karnataka supported, BigMint observed.

"NMDC Karnataka has increased iron ore offers post-price hike announcement by the miner from Chhattisgarh. Moreover, improvement in export index has provided support to domestic prices," mentioned a Bellary-based seller.

Rationale:

No trade was recorded in this publishing window and was accorded with 0% weightage.

Seventeen (17) offers and indicative prices were reported, out of which sixteen (16) were considered as T2 trades receiving a 50% weightage.

Factors supporting low-grade offers:

NMDC hikes iron ore price for today's auction: NMDC Karnataka has announced list prices for auctions of iron ore today, i.e., 2 May, 2024 from its Donimalai mines. Revised prices for fines (-10 mm, Fe 59%) are at INR 3,819/t ($46/t), up by INR 161/t ($2/t), while lumps (10-40 mm, Fe 59%) prices are at INR 4,460/t ($53/t), up by INR 307/t ($4/t). Prices include royalty, DMF and NMET.

Supportive sentiments from export market: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index was stable w-o-w at $65.5/t FOB east coast on 2 May, 2024. However, most seaborne buyers are not available in the market as Chinese steelmakers will stay on holiday for this week. Meanwhile, trading activity remained muted in the last two days as restocking activity was concluded in China owing to Chinese Labour Day holidays.

Bellary sponge CDRI prices rise w-o-w: Sponge iron (CDRI) prices in Bellary, Karnataka rose by INR 450/t ($5/t) w-o-w. Prices witnessed an increase amid hike in semi-finished steel segment and decent trade activity.

Karnataka iron ore sales scenario (26 April-2 May, 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 financial year 2025 (FY'25) are expected to improve the supply side further. Meanwhile, post-NMDC price hike announcement, market participants are awaiting for the miner's Donimalai auction results.