- C-DRI prices fall as finished steel inventories remain elevated
- Bellary miners report weak response in recent low grade auctions
Low-grade iron ore fines prices in Karnataka remained largely stable in the assessment week ended 11 June, with demand for lower-grade material continuing to stay subdued. Fe 57% fines were assessed at around INR 2,750/t ex-mines, as buyers showed limited interest amid weak downstream consumption and persistent pressure on steel margins. Although sellers maintained firm offer levels, the absence of meaningful buying activity prevented any upward movement in prices.
In contrast, benchmark Fe 62% fines prices increased by INR 50/t ($0.5/t) w-o-w to INR 5,000/t ($52/t) ex-mines. The price gain was primarily supported by the ongoing scarcity of high-grade ore in the region rather than any improvement in underlying demand fundamentals. Limited availability has enabled miners to maintain elevated offer levels despite a challenging market environment.
The broader iron ore market continued to face headwinds from weak finished steel and sponge iron prices, which have constrained raw material procurement across the value chain. Market participants remained cautious, with most buyers prioritizing inventory management and liquidity preservation over fresh purchases. While supply-side tightness supported high-grade ore prices, elevated offer levels also discouraged buying interest, resulting in muted transaction volumes.
Auction performance during the week reflected the prevailing market conditions. Most low-grade iron ore lots either remained unsold or were booked at base prices, highlighting weak appetite for lower-grade material amid quality concerns and limited profitability for end-users. At the same time, several high-grade ore lots also failed to attract sufficient bids as buyers resisted higher prices. Direct sales activity remained sluggish, with procurement decisions largely restricted to immediate requirements.
Following NMDC’s recent iron ore price increase, several private miners also revised their offers upward. However, the market has yet to absorb these higher prices due to weak downstream demand and strained economics across the steelmaking sector.
Commenting on the market, a Bellary-based miner stated, “Our auction failed to attract any bids. Overall market sentiment remains weak, and sponge iron producers are increasingly preferring pellets over lumps due to better operational economics.”
Echoing similar concerns, a Bellary-based buyer noted that “weak cash flows in the finished steel segment have significantly impacted raw material procurement. According to the buyer, rising input costs, including iron ore and coking coal, coupled with poor realizations in finished steel, have squeezed margins to the extent that several producers are finding it more viable to curtail operations than continue production at a loss.”
Rationale
- One (1) trade via e-auction was recorded for Fe 57% in this publishing window and was not taken into consideration. Hence, the T1 trade category was accorded 0% weightage.
- Fifteen (15) offers and indicative prices were reported, out of which eight (8) were considered as T2 trades. These were accorded 100% weightage.
C-DRI prices fall by INR 100/t ($1/t) w-o-w in Bellary: Sponge iron (C-DRI) prices in Bellary fell by INR 100/t ($1/t) w-o-w to INR 26,500/t ($276/t), pressured by extremely weak buying interest and elevated finished steel inventories. Demand from steelmakers remained subdued as poor margins and sluggish steel sales continued to weigh on production activity. Several mills in the region have either curtailed operations or temporarily shut down facilities, reflecting the challenging conditions facing the domestic steel industry.
Karnataka iron ore sales scenario (5- 11 June 2026)
Outlook
Iron ore prices in Karnataka are expected to remain largely range-bound in the near term. Weak steel demand, poor sponge iron margins, and cautious raw material procurement are likely to keep overall market sentiment subdued. While the ongoing scarcity of high-grade ore may continue to support Fe 62% fines prices, limited buying interest and pressure on steelmakers’ profitability could restrict any significant upside. Market participants will closely monitor finished steel prices and production levels, as a recovery in downstream demand will be crucial for improving iron ore trade activity and price sentiment.
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