- Bid realisation weaker than expectations
- Buyers resist aggressive procurement
BigMint’s weekly assessment highlighted a firm undertone in Karnataka’s iron ore market, with low-grade fines (Fe 57%) holding strong at INR 2,700/t ($30/t) ex-mines and Fe 62% grade fines steady at INR 5,150/t ($57/t), both unchanged week-on-week. While prices appear stagnant on the surface, they are being quietly supported by tight availability and selective buying interest. However, actual trade activity remained largely absent, underlining the cautious and calculated approach adopted by buyers across the region.
A clear divide is emerging in the market dynamics. High-grade material is witnessing acute shortage, and with only a handful of miners offering such cargoes, premiums are being sustained despite limited overall activity. Demand for superior grades continues to persist, enabling sellers to maintain elevated price levels amid constrained supply.
In contrast, low-grade material is facing visible pressure. Several miners struggled to attract competitive bids in recent auctions, reflecting weak consumption appetite. Low-grade fines are increasingly failing to generate meaningful responses, compelling some private miners to reconsider pricing strategies.
Compounding the situation, NMDC Limited is currently grappling with logistical constraints, which have restricted lifting and dampened auction participation. Even with relatively lower base prices, bids have not shown the kind of enthusiasm witnessed earlier, indicating broader market hesitation.
A Bellary-based miner shared with BigMint, “High-grade material continues to command premium realizations due to limited availability, but low-grade consumption remains sluggish. Given the current sentiment, private miners are being pushed to soften prices.”
Echoing similar caution, a Bellary-based buyer stated, “We are in a wait-and-watch mode. Existing inventories are sufficient for now, and given the uncertain market direction, it is difficult to decide whether to procure immediately or defer purchases. Hence, we are relying on old stocks and monitoring the situation closely.”
Rationale
- One (1) trade via e-auction was recorded for Fe 57% in this publishing window and was not taken into consideration. Hence, the T1 trade category was accorded 0% weightage.
- Fifteen (15) offers and indicative prices were reported, out of which eleven (11) were considered as T2 trades. These were accorded 100% weightage.
C-DRI prices remains drop by INR 350/t ($3.5/t) w-o-w in Bellary: Prices of sponge iron (CDRI) in Bellary dipped by INR 350/t ($4/t) w-o-w to INR 26,350/t ($290/t). Bellary CDRI prices remained under pressure during the week, primarily due to subdued buying interest from steel manufacturers both in the local market and across Western India. The slowdown in procurement was largely attributed to limited downstream demand for finished steel products, which prompted mills to operate cautiously and maintain lean raw material inventories.
As a result, trade activity remained moderate, with only need-based purchases taking place. Market participants expect prices to remain range-bound unless there is a visible improvement in finished steel demand.
Karnataka iron ore sales scenario (20-26 February 2026)
Outlook
Iron ore prices in Karnataka are expected to remain stable or witness mild downward correction in the near term if support from sponge iron and downstream steel sectors continues to weaken. With C-DRI prices under pressure and buyers maintaining lean inventories, fresh trade activity may remain limited. A meaningful price recovery will largely depend on improvement in finished steel demand and stronger participation in upcoming auctions.
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