- Steel production yet to normalise despite improved weather
- Weak steel demand, stagnant pellet tags limit iron ore offtake
Domestic low-grade iron ore fines (Fe 57%) prices in Karnataka’s Bellary remained stable this week, reflecting the persistent lull in market activity. BigMint’s weekly index for Fe 57% fines stood at INR 3,100/t ($35/t) ex-mines, excluding taxes, unchanged from the previous week. Similarly, Fe 62% fines were assessed at INR 5,200/t ($59/t) ex-mines, inclusive of taxes, also maintaining parity on a w-o-w basis.
Market participants noted that transactions were largely confined to NMDC auctions, while direct sales by miners remained absent amid prevailing weak sentiment and limited buying interest. The broader tone in the Bellary iron ore market continued to be subdued, as downstream steel demand showed no signs of revival.
Industry sources indicated that finished steel sales remained muted, leading to a cascading effect on raw material demand. Adding to the market’s woes, pellet prices in Bellary have stayed stagnant for several weeks, underlining the lack of momentum across the steel value chain.
A Bellary-based buyer told BigMint, “The steel market is very bad right now. Although weather conditions have improved, full-fledged production has not resumed yet. It may take another week for operations to normalise.” Another local trader echoed similar concerns, remarking, “Prices are stagnant at the moment; we expect some improvement only by December if demand picks up.”
On the supply side, miners remained cautious. A Bellary-based miner observed, “Demand is dull here. We do not intend to reduce our prices further, but buyers are constantly negotiating for lower rates. The market feels like it is falling — nobody wants to step in and catch it.”
In line with the prevailing trend, NMDC rolled over its base prices for iron ore from its Donimalai mines in the auction held on 4 November 2025, signalling the absence of any significant shift in fundamentals.
Rationale
- One (1) trade via e-auction was recorded for Fe 57% in this publishing window but 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 unchanged w-o-w in Bellary: Prices of sponge iron (CDRI) in Bellary remained firm w-o-w at INR 25,000/t ($282/t). Sources indicated that C-DRI prices remained stable, as sponge iron producers, burdened by high raw material and input costs, held offers firm to protect margins. Limited supply and subdued demand kept trading thin, leaving the Bellary sponge iron market balanced yet cautious.
Outlook
Low-grade iron ore prices are likely to stay range-bound in the near term amid weak steel demand and cautious buying. Stable sponge iron prices and NMDC’s roll-over suggest limited downside risk. However, any recovery in steel production or pellet demand by December could lend mild support. Overall sentiment remains watchful yet steady.
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