India: Karnataka iron ore e-auction sales decline 22% y-o-y in Apr'26 on weak steel demand

• Lower miner offers pressure Karnataka iron ore prices
  
  
• KSMCL emerges as top iron ore seller in April
  
  

Iron ore e-auction sales in Karnataka declined by 22% y-o-y in April to 517,525 t, compared to 650,000 t in April'25, according to BigMint data. Of the total quantity sold during the month, iron ore fines accounted for around 198,000 t, while lumps contributed 319,525 t. However, in March around 12,48,000 t material got auctioned. Significantly drop in NMDC's auction quantity in April led to the decline in the sales.

Weak market sentiment was observed amid subdued demand from the sponge iron and finished steel sectors. Despite sponge iron prices witnessing a temporary increase at the beginning of the month, the market later entered a downward trend due to sluggish finished steel demand and limited buying interest. As a result, steelmakers and sponge iron producers adopted a cautious procurement strategy, restricting raw material purchases to fulfilling immediate requirements.

Adding to the pressure, coal prices surged sharply during the early part of April due to geopolitical tensions in the Middle East, significantly increasing production costs for sponge iron manufacturers. The higher input costs initially supported finished steel prices and prevented aggressive corrections in the market. However, as geopolitical tensions eased later in the month, coal and other commodity prices witnessed a fall, which weakened overall market sentiment and led buyers to delay fresh procurement amid expectations of further price corrections.

Auction activity also remained subdued as it marked the beginning of the new fiscal year. Several miners were engaged in revising documentation procedures, renewing statutory compliances, and completing administrative formalities, which typically require around 15-20 days. Consequently, auction notifications remained limited during the month, reducing overall material availability in the market and weighing further on sales volumes.

NMDC witnesses sharp decline in auction volumes

State-owned miner NMDC Limited recorded a sharp decline in Karnataka auction sales, selling only around 40,000 t of lumps during the month. The fall was mainly attributed to limited auction activity amid logistical disruptions and procedural delays at the start of the fiscal year, which impacted auction scheduling and material movement.

In contrast, the company had sold around 896,000 t of iron ore in March.

In comparison, NMDC had sold around 320,000 t of iron ore through Karnataka auctions in April, highlighting the significant reduction in volumes this year.

Other miners show mixed performance

Karnataka State Minerals Corporation Limited (KSMCL) emerged as the largest seller, recording a sharp rise in sales volumes to around 266,500 t, compared to 131,000 t in April. Sales during the month is supported by competitive pricing strategies, improved buyer participation, and higher availability of lower-grade material. Since these auctions were conducted immediately after the commencement of the fiscal year, buyers actively participated in procurement as offered prices were considered commercially viable. In March , total sales by the company was reported at around 166,000 t.

Sandur Manganese and Iron Ores Limited (SMIORE) ranked second, selling around 81,920 t during the month, compared to nearly 147,000 t in April. In March SMIORE sold 87,000 t of iron ore.

Vedanta Limited ranked third with sales of around 59,000 t of lumps, including hematite and siliceous grades, against total offerings of approximately 63,000 t.

Meanwhile, Sri Kumaraswamy Minerals Private Limited (SKMEPL) sales stood at nearly 44,000 t of lumps during the month.

Similarly, miner R Praveen Chandra sold around 22,105 t in April, while auctions conducted by U Krishna Prasad recorded sales of only 4,000 t of lumps.

Iron ore prices decline on sluggish sentiment

The monthly weighted average e-auction prices of iron ore fines (Fe 60%) stood unchanged m-o-m at INR 3,100/t. Meanwhile, lumps prices (10-40 mm, Fe 63%) also stood steady at INR 4,000/t ($57/t) m-o-m. Prices are on ex-mines basis, excluding royalty, DMF, and NMET.

On a y-o-y basis, the weighted average price of Fe 60% fines declined by INR 300/t, while Fe 63% lumps witnessed a sharper drop of INR 900/t.

The decline in prices was mainly attributed to sluggish steel demand, cautious procurement by buyers, and lower opening prices offered by miners to attract bids and improve auction participation.

Outlook

Iron ore e-auction activity in Karnataka is expected to improve in the coming months as miners resume regular auction schedules following the completion of fiscal-year documentation and compliance procedures. Market participants anticipate trading activity may increase as restocking before monsoon commences in the region.

However, demand recovery from the sponge iron and finished steel sectors will remain a key factor influencing auction participation and price trends in the near term.