- Material availability a constraint
- Fall in export prices weighs on market
Domestic low-grade iron ore fines (Fe 57%) prices continued to remain stable this week in Karnataka’s Bellary. BigMint’s weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,600/t ($43/t) ex-mines Bellary.
The absence of trades amid non-availability of material owing to some miners’ ECs getting exhausted towards the fiscal year (FY’24)-end weighed on Karnataka’s low-grade iron ore market. Meanwhile, no sales were reported for low-grade material via the auction mode as well.
“Material availability is tight in the region as most of the miners have finished their ECs, leading to material shortage,” a buyer from Bellary told BigMint.
However, the recent iron ore auction conducted by NMDC Kumaraswamy on 19 February fetched active participation. According to sources, 132,000 t fines (Fe 59.15-62.93%) and 252,000 t lumps (10-40, Fe 60.36-64.44%) got booked at INR 3,673-5,527/t ($44-67/t) and INR 5,292-5,999/t ($64-72/t) against the base price of INR 3,627-4,389/t ($44-53/t) and INR 4,072-4,935/t ($49-60/t), respectively. Prices are on FOR, ex-stockpile/mines basis and inclusive of royalty, DMF and NMET.
Another iron ore auction for 20,000 t of fines (Fe 57%) and 4,000 t of lumps (10-40 mm, Fe 57%) was scheduled by NMDC from Donimalai on 21 February. However, the results could not be confirmed at the time of publishing this report.
Rationale:
- No trade was recorded in this publishing window and was accorded 0% weightage.
- Thirteen (13) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades receiving 100% weightage.
BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $2/t w-o-w to $81/t FOB east coast on 22 February post Chinese Lunar New Year holidays. “No active deal has been heard for low-grade ore recently. Meanwhile, export market sentiments are also weak as of now after Chinese holidays”, informed a Bellary-based miner.
Karnataka iron ore sales scenario (16-22 Feb’24)
Outlook
Domestic low-grade iron ore prices and trade in Karnataka are expected to remain under pressure due to soft market trends amid fiscal year-end and bearish export market sentiment. However, sources are of the opinion that NMDC may revise prices soon.