India: Karnataka’s iron ore e-auction sales rise 6% m-o-m in Jan’25

• NMDC’s offered volume up 2% m-o-m in Jan
• Proposed MRT bill expected to impact trade

Iron ore e-auction sales volumes in Karnataka increased marginally by around 6% to 1.17 million tonnes (mnt) in January 2025 against 1.10 mnt in December 2024, data maintained with BigMint show. Of the total volume sold in the month under review, fines accounted for 648,000 tonnes (t) (up 17% m-o-m), while lumps constituted 523,700 t (up 5% m-o-m).

The increase in volumes may be attributed to (1) a rise in miners’ offered quantities and (2) higher bookings by buyers following lacklustre procurement in December. Notably, in December, some auctions witnessed nil quantities booked.

Additionally, regional demand-supply dynamics contributed to heightened activity in the e-auctions, sources informed BigMint.

Miner-wise breakup – NMDC continues to lead

• National Mineral Development Corporation (NMDC), India’s largest iron ore miner, sold around 924,000 t from Karnataka via auctions in January, a slight increase of 2% against 904,000 t in December. Of the total volume sold, 592,000 t were fines (up 20% m-o-m) and 332,000 t were lumps (down 19% m-o-m). Notably, the miner maintained its status as the top auctioneer last month as well.
• Sandur Manganese and Iron Ores (SMIORE) sold 88,000 t of lumps, reflecting a significant 52% increase from the 58,807 t sold in December, despite the absence of fines in the total sales volume. The increase in sales volume was primarily attributed to the higher amount of lumps offered by the miner.
• Karnataka State Minerals Corporation Limited (KSMCL) emerged as the third-leading miner, selling around 48,000 t of fines (up 71% m-o-m) and 36,000 t lumps (up 17% m-o-m). This took its total sales volume via e-auctions to 84,000 t in January, up 43% compared to 58,807 t in December 2024.
• Vedanta sold 60,000 t of iron ore lumps in January, a sharp 67% increase as compared to December.
• R Praveen Chandra managed to sell only 7,700 t of lumps in January 2025. Notably, due to uncertain market dynamics, the miner opted not to offer raw materials in December.

E-auction prices fall m-o-m amid NMDC price cut, falling offers

The monthly weighted average e-auction prices of iron ore fines (Fe 60%) stood at INR 3,400/t ($39/t) and of lumps (10-40 mm, Fe 63%) at INR 4,550/t ($52/t), a fall of INR 50/t ($1/t) and INR 200/t ($2/t) m-o-m, respectively. Prices are on ex-mines basis, excluding royalty, DMF, and NMET.

Outlook

The proposed MRT is expected to affect Karnataka’s mining and steel industries. According to industry sources, demand for steelmaking raw materials in the region is likely to remain subdued. Stakeholders are concerned that the bill could increase mining costs and may undermine the sector’s overall competitiveness.