- NMDC’s iron ore auction receives premium bids
- Market sees tight supply of high-grade material
Domestic low-grade iron ore fines (Fe 57%) prices in Karnataka’s Bellary region rose this week amid favourable market sentiment. BigMint’s weekly index for low-grade fines (Fe 57%) inched up by $250/tonne (t) ($3/t) w-o-w to INR 3,150/t ($36/t) ex-mines Bellary (excluding taxes).
Meanwhile, the Fe 62% fines index increased w-o-w by INR 250/t ($3/t) w-o-w to INR 5,250/t ($61/t) ex-mines Bellary, inclusive of taxes, amid a shortage of material in the region. However, no direct deals were recorded this week.
The recent rise in sponge iron and finished steel prices lent support to iron ore tags in Karnataka. Improved end-product realisations strengthened buyer sentiment, positively impacting raw material pricing.
However, most miners in the region opting to channel their material through auctions, limiting direct market availability. Only 2-3 miners actively offered material this week. Additionally, a surge in bid premiums in NMDC’s auctions further contributed to the firmness in Karnataka’s iron ore prices.
However, a Bellary-based miner stated, “While NMDC’s bids may seem higher than base prices, they mostly reflect prevailing market levels. The sharp jump in high-grade prices is due to NMDC being the sole supplier amid tight availability. Lumps bids are in line with trends in the sponge iron and pellet markets, while NMDC also remains the only active player for low-grade material.”
Rationale
- No trade was recorded for Fe 57% in this publishing window, and hence, the T1 trade category was accorded 0% weightage.
- Eighteen (18) offers and indicative prices were reported, out of which thirteen (13) were considered as T2 trades. Hence, this category was accorded 100% weightage.
Key market drivers
- NMDC’s auction receives active response: NMDC’s recent iron ore auctions from its Donimalai and Kumaraswamy mines received a healthy response. On 22 July, Donimalai’s auction saw full booking of 20,000-t lumps (10-40 mm, Fe 56%) at INR 3,512/t ($41/t) and 8,000-t fines (Fe 56%) at INR 2,842/t ($33/t). Similarly, the 23 July auction from the Kumaraswamy mines recorded sales of 77,000-t lumps (10-40 mm, Fe 57.37-64.17%) at INR 4,002-6,181/t ($46-72/t), and 108,000-t fines (Fe 58.15-62.61%) were booked at INR 3,359-5,683/t ($39-66/t). All prices are on an ex-mines basis and include royalty, DMF, and NMET.
- Bellary C-DRI prices increase w-o-w: Prices of sponge iron (CDRI) in Bellary rose by INR 600/t ($7/t) w-o-w, supported by improved sentiment in the sponge iron segment and active bookings over the past few days.
- Low-grade export prices rise w-o-w: BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index rose by $1.5/t w-o-w to $66/t FOB east coast on 24 July, driven by buoyant macroeconomic indicators from China and a sharp rally in international iron ore prices. Active seaborne trade was witnessed from the Indian coast as Chinese buying interest gained momentum, with several exporters managing to conclude deals for early-August shipments.
Karnataka iron ore sales scenario (18-24 July 2025)
Outlook
Karnataka iron ore prices are likely to remain firm in the near term, supported by strong demand from sponge iron and steel producers, limited availability of high-grade material, and continued preference of miners to route sales through auctions.
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