Karnataka: Low-grade iron ore prices largely stable amid supportive market sentiments

• Export index recovery supports domestic prices
  
  
• Auctions fetch premium bids
  
  
• Market awaits Donimalai price revision
  
  

Domestic low-grade iron ore fines (Fe 57%) prices remained largely stable this week in Karnataka's Bellary. BigMint's weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,000/t ($40/t) ex-mines Bellary (excluding taxes), a marginal w-o-w drop of INR 50/t ($1/t). Prices were also heard at a higher level of INR 3,400-3,700/t ($41-44/t), excluding taxes. However, no trades were reported at the elevated price levels.

Recovery in low-grade export offers ahead of China's Labour Day holiday, pellet prices and lack of offers have kept low-grade offers away from pressure, BigMint noted. Meanwhile, trades have gained momentum with miners kickstarting their productions with fresh ECs in the current fiscal (FY'25).

"Prices are largely stable and supplies have improved but yet to match the current demand," mentioned a buyer from the region.

At the same time a Bellary-based miner told BigMint, "SMIORE was the only one to offer low-grade fines in its last auction. That's the only reference price market has right now. Offers are yet to pick up."

Rationale:

• One trade amounting to 28,000 t (via e-auction) was recorded in this publishing window and was accorded 50% weightage.
  
  
• Twenty (20) offers and indicative prices were reported, out of which sixteen (16) were considered as T2 trades receiving 50% weightage.
  
  

Factors supporting low-grade offers:

• NMDC Kumaraswamy auction fetches premium bids: NMDC conducted an auction for around 76,000 t fines (Fe 58.12-62.13%) from its Kumaraswamy mines on 19 April, 2024. According to sources, the entire quantity got booked at INR 3,758-4,145/t ($45-50/t) against the base price of INR 3,228-3,995/t ($39-50/t). Notably, bid prices were higher by INR 530/t ($6/t).
  
  
• Supportive sentiments from export market: BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $0.5/t w-o-w to $65.5/t FOB east coast on 25 April, 2024. Iron ore fines prices in the seaborne market remained supportive this week amid positive enquiries from Chinese buyers.
  
  
• Bellary pellet prices up INR 100/t w-o-w: Pellet (Fe 63%) prices in Bellary, Karnataka inched up w-o-w by INR 100/t ($1/t) to INR 10,700/t ($128/t) exw on 23 April, 2024. Pellet prices witnessed an increase this week amid hike in offers and active deals.
  
  

Karnataka iron ore sales scenario (19-25 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 further.