- NMDC Donimalai rolled over its base price for auction
- Buyers anticipate a price correction in the near term
Prices of domestic low-grade iron ore fines (Fe 57%) in Bellary region of Karnataka inched down by INR 50/t ($1/t) on 27 Nov. BigMint’s weekly index for Fe 57% fines stood at INR 3050/t ($34/t) ex-mines, excluding taxes. However, Fe 62% fines were assessed at INR 5,200/t ($59/t) ex-mines, inclusive of taxes, maintaining stability on a w-o-w basis.
Although finished steel remained positive lent some support, the uplift has not been strong enough to prevent a correction in iron ore prices. Market stability over recent weeks had suggested acceptance of prevailing levels, but extremely low auction base prices in the region have intensified competition. As a result, private miners are being compelled to reduce their offers simply to remain competitive, contributing to the price drop observed this week.
Further pressure stems from the type of material entering the market. Much of the ore available is suited primarily for blast-furnace operations, leaving sponge iron manufacturers who form a significant share of the demand struggling to utilize it efficiently. This compatibility gap has led to heavier discounts on low-grade fines and added momentum to the downward price trend as per a buyers in Karnataka.
In contrast, high-grade iron ore remains scarce across major producing hubs. Only a select few miners hold meaningful volumes, which receive strong buying interest during auctions. A number of direct deals were also concluded this week, reflecting urgency among steelmakers to secure limited high-grade supplies. Buyers currently prefer direct negotiations as they can secure more flexible and discounted pricing compared to higher auction base rates, creating a clear divide between the high-grade and low-grade market segments.
“Auctions are getting a weak response because buyers are pushing for deeper discounts and are unwilling to accept the quoted base prices. At the same time, sellers are under pressure to liquidate material, which is further dampening auction participation,” said a Bellary-based miner in a statement to BigMint.
A local buyer added that “many sponge iron producers are operating at a loss, with some even stepping out of the market temporarily. Due to financial strain and yield concerns, these units are increasingly shifting toward pellets or better-quality lumps, which offer more efficiency and lower production risks under current market conditions.”
NMDC rolled over its base prices for iron ore from its Donimalai mines in the auction held on 25 November 2025, signalling the absence of any significant shift in fundamentals.
Rationale
- Three (3) trade via e-auction was recorded for Fe 57% in this publishing window but only one (1) taken into consideration. Hence, the T1 trade category was accorded 50% weightage.
- Fifteen (15) offers and indicative prices were reported, out of which thirteen (13) were considered as T2 trades. These were accorded 50% weightage.
NMDC’s auction receives normal response: NMDC’s recent iron ore auctions from its Donimalai and Kumaraswamy mines received a fairly positive response. On 25 November, the Donimalai mine auction saw full bookings of 24,000 t of fines (Fe 56%) at the base price of INR 2,989/t. Similarly, the 26 November auction from the Kumaraswamy mines recorded sales of 40,000 t lumps (10-40 mm, Fe 60.69%) at INR 4,285/t against the base price of INR 3,955/t and 80,000 t fines (Fe 58.93-62.97%) at INR 3,099-5,133/t against the base price of INR 3,009-3,823/t . All prices are on an ex-mines basis and include royalty, DMF, and NMET.
Karnataka iron ore sales scenario (21-27 November 2025)
Outlook
The Karnataka iron ore market is expected to remain largely stable in the near term, with low-grade prices finding support from steady steel and sponge iron sentiment despite recent corrections. While auction-related pressure and limited sponge iron demand may prevent any significant upside, prices are likely to stabilise around current levels as sellers resist deeper cuts and buyers show consistent interest at discounted rates.
Leave a Reply