- Absence of offers, trades
- Shortage of material persists towards fiscal-year end
- Fall in iron ore export prices weighs on domestic market
Domestic low-grade iron ore fines (Fe 57%) prices fell by INR 200/t this week in Karnataka’s Bellary. BigMint’s weekly index for low-grade iron ore fines (Fe 57%) stood at INR 3,600/t ($43/t) ex-mines Bellary.
The absence of trades amid non-availability of material towards fiscal-year (FY24) end weighed on Karnataka’s low-grade iron ore prices, BigMint noted. However, the recent auction conducted by NMDC Kumaraswamy fetched active participation. According to sources, 316,000 t of fines (Fe 58.12-63.81%) were booked at INR 3,440-5,413/t against the base price of INR 3,430-4,576/t. Prices are on FOR, ex-stockpile/mines basis and inclusive of royalty, DMF and NMET.
“Most of the miners are not offering low-grade currently”, mentioned a Bellary-based miner.
“Low-grade material has been allocated mostly towards the export market which has created shortage in the domestic market. Domestic players are mostly offering high-grade iron ore for sales either directly or via auction “, another Bellary-based source told BigMint.
Rationale:
- No trade was recorded in this publishing window and was accorded 0% weightage.
- Twelve (12) indicative prices were reported, and all were considered as T2 trades receiving 100% weightage.
Factors weighing on low-grade market:
- Low-grade export prices fall w-o-w: BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $3/t w-o-w to $83/t FOB east coast on 8 February, 2024 ahead of Lunar New Year holidays. The seaborne Indian low-grade fines market remained sluggish this week as majority of participants were away for holidays. No decent trading activity was witnessed during the week while sellers also kept their offers on hold.
- Drop in sponge CDRI prices w-o-w: Bellary sponge iron (C-DRI) prices dropped w-o-w on 8 February, 2024 by around INR 450/t ($5/t). Trade volumes have remained moderate throughout the week as buyers resisted high offers and hence focused only on need-based procurement to meet immediate requirements.
Karnataka iron ore sales scenario (2-8 February, 2024)
Outlook
Domestic low-grade iron ore prices and trades in Karnataka might remain under pressure due to ongoing Chinese holidays.