India: Karnataka’s low-grade iron ore prices fall post-NMDC price reduction

• NMDC’s iron ore auction sees decent response
• Private miners’ offers remain unchanged

Domestic low-grade iron ore fines (Fe 57%) prices dropped w-o-w in Karnataka’s Bellary. BigMint’s weekly index for the same stood at INR 2,800/tonne (t) ($33/t) ex-mines Bellary, excluding taxes, down by INR 250/t ($3/t) w-o-w.

Similarly, the Fe 62% fines index dipped by INR 100/t ($1/t) w-o-w to INR 5,000/t ($58/t) ex-mines Bellary, inclusive of taxes.

BigMint noted that NMDC’s recent price reduction, coupled with bearish sentiment in the steel sector, exerted downward pressure on low-grade prices. However, private miners have yet to revise their offers.

Notably, NMDC revised its base prices for iron ore auctions from the Donimalai mines, Karnataka, on 2 July 2025. Prices of low-grade fines (Fe 56%) and lumps (10-40 mm, Fe 56%) were reduced by INR 614/t ($7/t) and INR 540/t ($6/t), respectively, to INR 2,842/t ($33/t) and INR 3,472/t ($41/t) from the rates set at the last auction for similar grades on 24 June. Prices are inclusive of royalty, DMF, and NMET.

NMDC’s iron ore auction receives decent response: NMDC auctioned 120,000 t of iron ore from its Kumaraswamy mines in Karnataka on 2 July, in which 72,000 t of fines (Fe 57.34–61.12%) received bids of INR 2,990-4,242/t (base price INR 2,988-3,837/t) and 48,000 t of lumps (10-40 mm, Fe 60.69%) were booked at INR 4,549/t (base price INR 4,444/t). Prices include royalty, DMF, and NMET.

Also, NMDC conducted an auction of 24,000 t iron ore from its Donimalai mines on 2 Jul’25 in which 16,000 t lumps (10-40 mm, Fe 56%) got booked at INR 3,482/t and 8,000 t fines (Fe 56%) got booked at base price of INR 2,842/t, respectively. Prices include royalty, DMF, and NMET.

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.
• Ten (10) offers and indicative prices were reported, out of which eight (8) were considered as T2 trades. These were accorded 50% weightage.

Karnataka iron ore sales scenario (27 Jun- 3 Jul, 2025)

Outlook

Domestic low-grade iron ore prices are likely to remain under pressure in the near term. The impact of NMDC’s recent base price cut is expected to reflect more clearly in the market in the coming days. Muted demand and bearish steel market sentiment may further weigh on prices.