Karnataka: Low-grade iron ore prices unchanged as market awaits auction results for price clarity

• Trades continue to remain subdued
  
  
• Miners have started production for current fiscal
  
  
• Market awaits auction results for price clarity
  
  

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

"Heard prices at these levels before Ugadi festival, although there are no active offers yet. Also recent auctions have received subdued response," mentioned a Bellary-based buyer.

Domestic prices remained stable this week amid no active offers by miners resulting in subdued trades. However, iron ore production has been started in the region for the current fiscal year (FY'25), although, market participants have to wait for another 2-3 weeks for fresh offers, sources informed BigMint.

"Our production has started for this financial year and we will be opening offers most probably by next week," a miner from the region told BigMint.

Rationale:

• No trade was recorded in this publishing window and was accorded with 0% weightage.
  
  
• Eleven (11) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades receiving 100% weightage.
  
  

On the other hand, BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index recovered slightly by around $1/t w-o-w to $56.5/t FOB east coast on 11 April, 2024. Notably, post China's QingMing holidays, low-grade iron ore prices increased in the seaborne market. However, Chinese buyers are looking for cheaper materials, creating bid-offer disparity in the market.

Karnataka iron ore sales scenario (5-11 April, 2024)

Outlook

Domestic low-grade iron ore prices are expected to remain supported amid improving export index and at the same time, the fresh EC's from FY'25 is expected to improve the supply side. Meanwhile, the market awaits upcoming NMDC Donimalai and SMIORE iron ore auction to get better price clarity.