India: Low-grade iron ore fines prices in Karnataka remain flat for 6th consecutive week

• Mills actively seek higher grades for production efficiency
• Limited supply supports prices but deals remain absent

Domestic low-grade iron ore fines (Fe 57%) prices remained unchanged this week in Karnataka’s Bellary region, with BigMint’s weekly index assessed at INR 3,150/tonnes (t) ($36/t) ex-mines Bellary (excluding taxes), steady w-o-w. This marks the sixth consecutive week of price stability.

Similarly, the Fe 62% fines index stood at INR 5,250/t ($60/t) ex-mines Bellary (including taxes), stable w-o-w. However, deals remained absent.

A shortage in high-grade iron ore continued to weigh on the market, keeping supply tight and demand firm. Market participants indicated that steelmakers and traders actively sought better-quality ore to maintain production efficiency, as the reduced availability of high-grade material created a supply imbalance. Limited access to such material also kept buyers cautious while, at the same time, ensuring steady support for high-grade offers.

A Bellary-based miner highlighted, “The requirement for high-grade ore remains strong in the region. Producers are increasingly blending available high-grade material to optimise their feed mix, while other miners are turning towards the utilisation of low-grade ore. This approach not only aids in mineral conservation but also helps generate additional revenue, as beneficiation and blending allow for effective usage of lower-quality resources.”

A Bellary-based buyer noted, “Buyers are maintaining sufficient inventory, so the market is expected to remain stable in the coming days.”

Rationale

• No trade was recorded for Fe 57% in this publishing window, and hence, the T1 trade category was accorded 0% weightage.
• Fourteen (14) offers and indicative prices were reported, out of which six (6) were considered as T2 trades. These were accorded 100% weightage.

Key market drivers

• Low-grade export prices largely firm w-o-w: BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index remained largely stable w-o-w at $65.5/t FOB east coast on 4 September. A hike in vessel freights led to higher CNF prices w-o-w. The seaborne market witnessed steady pricing, supported by stronger global benchmarks and an improvement in sentiment. However, exporters still struggled to close deals, with domestic supply limitations continuing to restrict availability.
• Bellary C-DRI prices inch up w-o-w: Sponge iron (CDRI) in Bellary edged up by INR 100/t ($1/t) w-o-w to INR 26,100/t ($296/t). The increase was largely driven by limited seller availability, as several manufacturers undertook maintenance shutdowns, which prompted buyers to book material at slightly higher levels.

Outlook

Low-grade prices are expected to remain range-bound, with limited trade activity due to supply constraints. Sponge iron prices could stay supported until production normalises post-maintenance shutdowns.