SteelMint: Falling export offers weigh on Karnataka domestic iron ore prices

• Falling export index continues to weigh on domestic prices
  
  
• Drop in sponge CDRI prices have also put pressure on prices
  
  
• No active trades reported in domestic market
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained unchanged this week in Karnataka's Bellary. SteelMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,800/t ($46/t) ex-mines Bellary, stable, w-o-w.

Significant fall in low-grade export prices, lower trades and weak sponge iron (CDRI) market sentiments collectively weighed on Karnataka's low-grade iron ore prices, SteelMint observed.

"Domestic prices have been affected by sharp drop in low-grade export offers. Meanwhile, recent iron ore auctions by leading miners failed to fetch high bids considering the current market scenario", mentioned a Bellary-based source.

Rationale:

• No trade was recorded in this publishing window and was accorded 0% weightage.
  
  
• Ten (10) offers and indicative prices were reported, out of which nine (9) were considered as T2 trades receiving 100% weightage.
  
  

Factors weighing on low-grade prices:

• Low-grade export prices fall w-o-w: SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $5/t w-o-w to $83/t FOB east coast on 18 January, 2024. The iron ore export index hit a two-month low level this week, as previously the same level was witnessed in the first half of November, 2023. Offers in the overseas market decreased following the sluggish buying from Chinese buyers. Meanwhile, the global iron ore and future prices fell this week ahead of the Chinese Lunar holidays which weighed on low-grade offers, too.
  
  
• Drop in sponge CDRI prices w-o-w: Bellary sponge iron (C-DRI) prices dropped w-o-w on 18 January, 2024 by around INR 350/t ($4/t). Prices fell on lack of buying enquiries in the spot market. As a result, suppliers in various regions of the country reduced their offers.
  
  

Karnataka iron ore sales scenario (11-18 Jan'24)

Outlook

Domestic low-grade iron ore prices and trades in Karnataka are expected to remain under pressure amid current market scenario.