- Miners yet to make fresh offers for current month
- Market faces tight supply of low, high-grade ore
Domestic low-grade iron ore fines (Fe 57%) prices remained unchanged w-o-w in Karnataka’s Bellary region. BigMint’s weekly index for the same (Fe 57%) stood unchanged w-o-w at INR 2,700/tonne (t) ($32/t) ex-mines Bellary (excluding taxes).
Similarly, the Fe 62% fines index was also assessed stable w-o-w at INR 4,800/t ($56/t) ex-mines Bellary, including taxes. Additionally, few offers were noted at higher levels, that is INR 5,050-5,100/t ($59-60/t). However, no deals were concluded at these values, as the market awaited fresh offers from other miners as well for the current month.
A source informed BigMint that the merchant market continued to grapple with a shortage of both low and high-grade iron ore, as miners have only recently commenced fresh production. Additionally, no major e-auctions were held last week. Along the same lines, a Chitradurga-based miner told BigMint, “We have begun offering material but do not yet have the exact Fe 57% grade available. There have been no export shipments either.”
Another major miner from the region noted, “Offers are yet to begin, and the process is expected to take some time – likely later this month.”
Meanwhile, market participants eagerly looked forward to the iron ore price announcements from the National Mineral Development Corporation (NMDC) from its Donimalai mines. According to a source from the region, the arrival of some import cargoes at southern ports has disrupted domestic trade. A manufacturer from the region highlighted, “The domestic market is under pressure from rising imported volumes.”
In a recent development, southern India-based direct reduced iron (DRI) traders and manufacturers booked imported high-grade iron ore lumps from South Africa, seeking to secure stable raw material supplies amid fluctuating supply and volatile pricing in the domestic market.
According to sources, around three Supramax vessels with Fe 65% grade material were booked, with shipment scheduled for May 2025. The material is understood to be sourced from Kumba Iron Ore, a leading South African supplier, known for its premium Fe content and low levels of alumina and silica. Indicative prices of the material booked were at around $110/t CFR India.
“There is a growing shortage of high-grade iron ore lumps in Karnataka. Currently, only a limited number of suppliers are offering material that meets high-grade specifications. However, even the make-up of these grades has reportedly started to decline, raising concerns about consistent quality. This supply tightness has further reinforced the need for imports, particularly of South African origin, which are seen as a reliable alternative, offering higher and more consistent Fe content,” noted a major Bellary-based buyer.
Rationale
- Zero (0) trades were recorded in this publishing window, so T1 trade received 0% weightage.
- Seventeen (17) offers and indicative prices were reported, of which fourteen (14) were considered as T2 trades. Hence, this category was accorded 100% weightage.
Outlook
Domestic low-grade iron ore prices are expected to remain under pressure in the region. Market participants are closely watching out for NMDC’s upcoming price revision, while uncertainty persists around the proposed mineral rights tax (MRT) bill. At the same time, the prevailing trend highlights a broader move towards raw material diversification, with sponge iron manufacturers exploring alternative sources such as South Africa and Brazil to maintain cost-efficiency and ensure uninterrupted operations.
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