- Weak participation seen in low-grade iron ore auctions
- Direct deals remained absent in this week
According to BigMint’s latest weekly assessment, the iron ore market in Karnataka continued to display a largely firm undertone, with prices mostly holding steady despite subdued trading activity. Supply-side constraints, particularly for higher-grade material, combined with cautious procurement strategies from buyers, shaped the market dynamics during the week.
Low-grade iron ore fines (Fe 57%) witnessed a marginal decline of INR 50/t ($0.5/t), settling at INR 2,650/t ($29/t) ex-mines. In contrast, Fe 62% grade fines remained stable week-on-week at around INR 5,100/t ($56/t), reflecting sustained support from tight supply conditions and steady demand for higher-grade material.
Market sentiment earlier in the week was partly supported by activity from the sponge iron segment, which helped keep prices from softening further.
A persistent shortage of high-grade iron ore remains one of the key factors preventing any notable price correction in the region. Limited availability of higher Fe content material, coupled with consistent demand from end-users, has kept market participants firm on their price expectations. The constrained supply pipeline for premium-grade ore continues to lend structural support to prices across the region.
On the other hand, low-grade iron ore auctions received little to no participation from buyers, highlighting the lack of appetite for lower Fe content material. The absence of bids in several auctions signals weak demand fundamentals for this segment.
Adding to the pressure, several sponge iron producers are increasingly shifting towards pellets, which offer better efficiency and consistency in the current operating environment. This gradual transition has further dampened demand for low-grade fines and lumps, keeping price recovery limited in this category.
A miner based in Bellary highlighted multiple challenges affecting production economics. According to the miner, “coal prices are rising, which could increase overall raw material costs. Additionally, gas availability constraints amid geo-political tension and declining production of high-grade iron ore are adding further pressure on the supply side. The miner also noted that technical issues related to the Tumbler Index (TI) of lumps remain a concern for market participants.”
Meanwhile, a buyer from Bellary stated that “there has been no significant change in raw material prices. According to the buyer, miners continue to quote relatively higher prices, which many buyers find unaffordable, resulting in several auction volumes remaining unsold due to weak participation.”
NMDC Karnataka has revised list prices for its iron ore auction from the Donimalai mines. Post-revision, fines (-10 mm, Fe 56%) were at INR 2,203/t ($24/t), up by INR 26/t ($0.2/t), while lumps (10-40 mm, Fe 55%) stood at INR 2,237/t ($24/t), its earlier price for (10-40 mm, Fe 54%) was at INR 1,995/t ($22/t). Prices exclude royalty, DMF, and NMET.This follows marginal hike of INR 50-100/t the miner announced from its Chhattisgarh mines for March’26.
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.
- Fourteen (14) offers and indicative prices were reported, out of which ten (10) were considered as T2 trades. These were accorded 100% weightage.
C-DRI prices inch up by INR 200/t ($2/t) w-o-w in Bellary: Prices of sponge iron (CDRI) in Bellary edged up by INR 200/t ($2/t) w-o-w to INR 28,200/t ($306/t). The uptick in prices was mainly driven by the increase in coal costs, which raised overall production expenses for sponge iron manufacturers and prompted mills to revise their offers upward. Despite the price rise, market activity remained moderate during the week, with limited deals reported as buyers continued to adopt a cautious procurement approach amid prevailing cost pressures.
Karnataka iron ore sales scenario (06-12 March 2026)
Outlook
Iron ore prices in Karnataka are expected to remain firm in the near term, supported by the continued shortage of high-grade material. However, weak demand for low-grade fines and cautious buying from sponge iron producers may keep downward pressure on lower-grade segments. Meanwhile, sponge iron prices in Bellary may stay slightly firm, largely influenced by fluctuations in coal costs and downstream steel demand.
Leave a Reply