- NMDC’s Donimalai auction fetches active response
- Market awaiting outcome of upcoming auction
Domestic low-grade iron ore fines (Fe 57%) prices witnessed a marginal increase this week in Karnataka’s Bellary region. BigMint’s weekly index for low-grade iron ore fines (Fe 57%) stood at INR 2,700/tonne (t) ($32/t) ex-mines Bellary (excluding taxes), witnessing a marginal hike of INR 50/t w-o-w.
Similarly, the Fe 62% fines index was assessed at INR 4,750/t ($57/t) ex-mines Bellary, including taxes, up by INR 250/t w-o-w. However, some higher offers were noted in the range of INR 5,400-5,600/t ($65-67/t), driven by limited supplies of high-grade ore due to the monsoon season. However, no transactions occurred at these higher prices, as buyers have not yet agreed to the increases.
The National Mineral Development Corporation (NMDC) has decided to maintain iron ore prices in the latest auction from its Donimalai mines. This, combined with material shortages due to heavy rainfall and a rebound in the low-grade export index, has helped support domestic prices. A buyer from Bellary told BigMint, “The export market and global prices have improved this week. While miners have stockpiles, they are not releasing these into the market, resulting in material shortages and higher prices.”
On the contrary, another buyer from the region said, “Although export prices have picked up, these are yet to gain momentum.”
In the meantime, the market is waiting for another NMDC auction from its Kumaraswamy mines for a clearer price direction. The miner plans to auction around 144,000 t of lumps (10-40 mm, Fe 60.96-63.91%) and 128,000 t of fines (Fe 55.13-61.35%) on September 27, 2024. The company has not yet announced the prices, which will include royalty, DMF, and NMET.
Rationale:
- Zero (0) trade was recorded in this publishing window, receiving a 0% weightage.
- Eleven (11) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades. Hence, accorded a 50% weightage.
Factors supporting Karnataka’s low-grade domestic prices:
- Iron ore fines export index rises $8/t w-o-w: BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index increased by around $8/t w-o-w to $60.5/t FOB east coast on 26 September, 2024. The Indian lower-grade fines market displayed positive trends, with increased trading at higher premiums in the seaborne market, driven by improved sentiment in China. This week, the discount level decreased, now offered at 19-20% on the global fines index. Recent spot and futures price increases for global fines have further supported transactions in Indian exports of lower-grade fines.
- NMDC Donimalai auction fetches premium bids: On September 23, 2024, NMDC held an auction for 48,000 t of iron ore from its Donimalai mines. A total of 12,000 t of lumps (10-40 mm, Fe 59%) were sold at prices ranging from INR 4,924-4,949/t ($59/t), significantly above the base price of INR 3,809/t ($46/t). Meanwhile, 36,000 t of fines (Fe 59%) were booked at INR 3,400-3,410/t ($41/t), compared to the base price of INR 3,300/t ($39/t). Notably, bid prices for lumps increased by INR 1,140/t ($14/t), while fines saw a rise of INR 110/t ($1/t).
- Bellary C-DRI prices rise w-o-w: Sponge iron (CDRI) prices in Bellary, Karnataka witnessed a significant increase w-o-w. The improvement in semi-finished prices has kept sponge prices supported, sources informed BigMint.
Karnataka iron ore sales scenario (20-26 September, 2024)
Outlook
Domestic low-grade iron ore prices are anticipated to rise in the near term, driven by expectations of further price increases from miners due to supply concerns in the region. Meanwhile, the market is looking forward to the results of NMDC’s iron ore auction for additional price clarity.
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