- Supply concerns continue to support high-grade prices
- Early monsoon fuels logistical, demand-side concerns
Prices of domestic low-grade iron ore fines (Fe 57%) remained steady this week in Karnataka’s Bellary region. BigMint’s weekly index for the same stood unchanged at INR 3,100/tonnes (t) ($36/t) ex-mines Bellary, excluding taxes. However, trading activity in this particular segment stayed muted, as buyers showed a stronger preference for high-grade material.
Similarly, the Fe 62% fines index was also assessed stable w-o-w at INR 5,250/t ($61/t) ex-mines Bellary, inclusive of taxes. According to BigMint, miners actively offered high-grade material in the merchant market, primarily through direct sales, as the frequency of e-auctions has declined. Additionally, supply constraints continued, which supported prices of this grade.
“High-grade iron ore remains in short supply, with NMDC once again being the only major supplier in the merchant market. This is driving strong participation in its auctions,” said a buyer from Bellary.
Moreover, BigMint noted a significant rise in direct sales volumes from the Bellary region, as miners have been increasingly preferring this route to e-auctions. One miner stated, “Around 90% of our total sales are now happening through direct channels, as e-auctions are failing to fetch the expected premiums.”
Rationale
- One (1) trade of Fe 57% via e-auction was recorded in this publishing window and was considered under T1 trade, receiving 50% weightage.
- Sixteen (16) offers and indicative prices were reported, out of which fourteen (14) were considered as T2 trades. These were accorded 50% weightage.
However, the early onset of monsoons in the region, coupled with volatility in the sponge iron market, raised apprehensions among miners about future demand trends. The combination of weather-related disruptions and fluctuating demand is expected to impact logistics, stock movement, and overall procurement activity in the coming weeks, said a Bellary-based source to BigMint.
BigMint’s sponge CDRI prices, exw-Bellary, decreased by INR 200/t ($2/t) d-o-d on 19 June. Prices declined amid low-to-moderate transaction volumes, as buyers waited for rates to bottom out before making purchases. Although there was a slight uptick in buying activity, it was not enough to support sponge iron prices amid persistently weak market sentiment.
Karnataka iron ore sales scenario (12-19 June 2025)
Outlook
Although supply concerns have so far supported Karnataka’s iron ore prices, the early onset of monsoons is likely to impact overall market dynamics. Rain-induced disruptions are expected to hamper mining activity, leading to reduced production, logistical challenges, and lower trade allocations. As a result, prices are also expected to remain volatile in the near term.
Moreover, sources indicate that market participants remain uncertain about the MRT bill, as there has been no substantial update from the President’s office. This lack of clarity continues to weigh on overall market sentiment.
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