- Labour strike at NMDC Donimalai weighs on offered quantity
- Low-grade iron ore prices are expected to increase further
Domestic low-grade iron ore fines (Fe 57%) prices witnessed an increase this week in Karnataka’s Bellary. BigMint’s weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,300/t ($40/t) ex-mines Bellary (excluding taxes), a w-o-w rise of INR 100/t ($1/t).
Supply concerns, active trades via both e-auction and direct sales along with supportive sentiments from low-grade fines exports and sponge iron (CDRI) market, BigMint noted.
“In a recent update, NMDC’s iron ore production and dispatches have been hampered since last week amid labour strike, sources from the region confirmed. Hence, offered quantity from the mines have come down raising supply concerns,” mentioned a Bellary-based buyer.
As a result, NMDC’s iron ore auction from its Donimalai mines today got postponed till further notice. To add auction details, 24,000 t of iron ore was put into auction today. Out of the total quantity, 20,000 t were iron ore fines (Fe 54%) and 4,000 t were lumps (10-40 mm, Fe 54%).
On the other hand, a Bellary-based miner told BigMint, “Currently, we are getting better price realisations in the domestic market amid supply shortage vs active demand. Hence, not offering in the export market. Also, low-grade prices are expected to increase further.”
Rationale:
- One (1) trade of 40,000 t was recorded in this publishing window and was accorded with 50% weightage.
- Fifteen (15) offers and indicative prices were reported, out of which ten (14) were considered as T2 trades receiving a 50% weightage.
Factors supporting low-grade offers:
- NMDC iron ore auction fetches premium bids: NMDC had an auction for 196,000 t of iron ore on 10 May, 2024 from its Kumaraswamy mines. As per sources, 68,000 t lumps (10-40 mm, Fe 61.21-61.34%) got booked at INR 4,967-4,987/t ($59-60/t) against the base price of INR 4,777-4,807/t ($57-58/t) and 128,000 t fines (Fe 56.24-61.90%) got booked at INR 3,037-4,906/t ($36-59/t) against the base price of INR 3,007-4,136/t ($36-50/t).
- Bellary CDRI prices rise d-o-d: Sponge iron (CDRI) prices in Bellary, Karnataka rose by INR 200/t ($2/t) w-o-w. This price hike can be attributed to the rising steel prices followed by active spot trading coupled with buying interest.
Karnataka iron ore sales scenario (9-16 May, 2024)
Outlook
Domestic low-grade iron ore prices are expected to remain supported amid supply concerns as demand is on comparatively higher side.