India: Lloyds cuts iron ore offers in Chandrapur, Maharashtra

• Weak downstream demand triggers fresh offer cuts by Lloyds
  
  
• Declining auction realisations reflect subdued demand outlook
  
  

Lloyds Metals and Energy has reduced offers for iron ore fines and pellets in Chandrapur, Maharashtra, amid weakening domestic market fundamentals and continued pressure across the steel value chain. The latest downward revision reflects subdued buying activity from sponge iron manufacturers, falling semi-finished steel prices, and softer outcomes in recent Odisha auction activity.

Iron ore fines (Fe 63%) offers were reduced by INR 300/t ($3/t) against previous revision in Apr. The current offers are at INR 6,350/t ($66/t) FOR Balharshah as of 22 May. Pellet offers stood at INR 10,000/t ($105/t) exw today. Notably, the mine had lifted offers in it's last revision announced on 06 Apr'26.

The reduction in offers comes at a time when domestic steel market sentiment remains under pressure. Weakness in sponge iron and semi-finished steel segments has significantly impacted procurement appetite among buyers, resulting in cautious purchasing and lower participation in spot and auction-based trades.

Recent auction results from Odisha Mining Corporation (OMC) further highlighted the deteriorating market conditions. In OMCs iron ore fines auction held on 20 May for 1.975 mnt ore (Fe 51-62%), only 1.374 mnt, or nearly 70% of the offered quantity, was booked. Most lots were concluded at base prices, while only a limited number of parcels managed to attract marginal premiums of INR 50-250/t over the reserve prices. Weighted average bids in the fines auction dropped sharply by around INR 700/t m-o-m, despite OMC already lowering base prices by INR 200-900/t ahead of the auction.

Similarly, in OMC's lumps auction for 1.3 mnt of iron ore lumps (Fe 60-65%), approximately 1.24 mnt or 95% of the offered quantity was booked at INR 4,750-7,100/t. Although some lots attracted average premiums of around INR 600/t over base prices, overall market sentiment remained weak as weighted average bids declined by nearly INR 900/t m-o-m. OMC had previously revised base prices downward by INR 150-1,100/t, indicating growing pressure on miners to align offers with subdued market conditions.

The sharp decline in auction bids was primarily driven by worsening economics in the sponge iron segment. Monthly average prices of Sponge iron (PDRI) in Hyderabad dropped substantially by INR 2,050/t ($21/t) m-o-m to INR 26,500/t ($277/t) exw in May'26. The decline in sponge iron realisations significantly affected raw material buying interest, particularly for lumps and pellets, which are largely consumed by the DRI industry.

At the same time, monthly average of billet prices in Hyderabad also weakened considerably, falling by INR 2,300/t ($24/t) m-o-m to INR 42,000/t ($440/t). The fall in billet prices reflects continued weakness in finished and semi-finished steel demand, further impacting confidence across the supply chain. Market participants indicated that buyers are currently maintaining a cautious approach toward fresh bookings amid expectations of further corrections in raw material prices.