- Tight supply supports higher grades, low grade flat on weak demand
- Need-based buying keeps overall market sentiment cautious
Iron ore prices in Karnataka remained largely stable w-o-w on 6 August 2026, supported by steady sponge iron and finished steel prices despite moderate trading activity. Buyers largely limited procurement to immediate requirements, while stable downstream prices prevented any significant correction in iron ore values.
According to BigMint’s latest assessment, Fe 57% iron ore fines remained unchanged w-o-w at INR 2,700/t ($28/t) ex-mines. Demand for lower-grade material stayed subdued as sponge iron producers continued to favour higher-grade ore to improve productivity, lower coke and coal consumption, and optimise production costs. Need-based procurement and lower operating margins at sponge iron plants kept buying interest weak, prompting suppliers to offer discounts to attract enquiries.
Meanwhile, Fe 62% iron ore fines held steady w-o-w at INR 5,000/t ($52/t) ex-mines. Prices of higher-grade ore continued to find support from limited availability, with only a handful of private miners offering consistent volumes. Although demand for high-grade material remained healthy, intermittent quality issues in some private miners’ supplies restricted buying interest and prevented any further price increase.
Auction activity remained moderate during the week. Lower-grade ore auctions received a muted response as sponge iron producers avoided material with higher gangue content, which increases slag generation, lowers metallic yield, and raises fuel consumption during production. In contrast, auctions for higher-grade ore witnessed healthy participation, with offered quantities fully booked at largely unchanged prices, reflecting continued preference for better-quality feedstock rather than aggressive price competition.
A buyer said, “Sponge iron producers are hesitant to build inventories as margins remain under pressure. During the monsoon, ore availability is lower, so we are largely consuming existing stocks instead of making fresh purchases.”
Another buyer stated, “We are compelled to procure higher-grade ore from private miners despite elevated prices, although dispatches from a major miner have improved significantly.”
Rationale
- Zero (0) 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.
- Sixteen (16) offers and indicative prices were reported, out of which thirteen (13) were considered as T2 trades. These were accorded 100% weightage.
C-DRI prices remain firm w-o-w in Bellary: Meanwhile, Bellary’s coal-based sponge iron (C-DRI) prices remained unchanged w-o-w at INR 26,800/t ($282/t). Stable sponge iron prices continued to provide cost support to iron ore, although producers remained cautious amid compressed margins and elevated raw material costs, particularly for coal and high-grade ore.
Karnataka iron ore sales scenario (31 July- 6 August 2026)
Outlook
Iron ore prices in Karnataka are expected to remain broadly stable over the coming weeks. While sponge iron prices have shown signs of softening over the past two trading sessions, higher-grade ore is likely to remain supported by limited availability. Lower-grade ore may continue to face pressure as sponge iron producers prioritise operational efficiency and seek to reduce coal and coke consumption, with procurement expected to remain largely need-based until downstream steel demand improves.
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