- Auction participation weak as buyers remain price-sensitive
- Sponge iron segment continues to operate under stress
Domestic iron ore prices in Karnataka’s Bellary region declined sharply w-o-w, weighed down by sluggish market activity and weak buying interest. BigMint’s weekly index for low-grade iron ore fines (Fe 57%) fell by INR 200/t ($2/t) to INR 2,800/t ($31/t) ex-mines, excluding taxes, as of 18 December, compared with the previous assessment on 11 December.
Similarly, prices of Fe 62% fines also fallen down by INR 100/t ($1/t) w-o-w to INR 5,100/t ($57/t) ex-mines, inclusive of taxes, reflecting continued pressure across both low- and high-grade segments amid subdued market sentiment.
Despite the broader weakness, high-grade iron ore continues to remain on a relatively firmer footing. Steady demand coupled with limited availability given that only a few miners are offering premium-grade material has kept this segment comparatively resilient. High-grade ore has made it the preferred choice for buyers attempting to safeguard margins in an otherwise challenging environment.
On the downstream front, finished steel and sponge iron prices saw a marginal improvement at the beginning of the week, but the momentum quickly faded, with prices slipping again today compared with last week. While the brief uptick provided temporary relief, it failed to restore profitability. A Bellary-based buyer told BigMint that “costing remains completely unviable for sponge iron producers, as the industry continues to face severe margin stress. There is virtually no margin cushion left offering no meaningful recovery. Under the current scenario, turnaround will only materialise once margins improve decisively. Until then, market sentiment is expected to remain subdued, with price firmly capped.”
From the supply side, stress is clearly visible. A Bellary-based miner said “material is being sold at lower prices due to mounting selling pressure, while buyers are increasingly avoiding auctions unless prices fall below base levels. Buyers remain extremely reluctant to book volumes at higher prices, reflecting weak confidence and highly cautious procurement behaviour.”
Adding to the uncertainty, a local seller pointed to persistent quality concerns with material from certain suppliers, noting that buyers are increasingly favouring select private miners. With ongoing shortages of consistent-quality lumps, many consumers are gradually shifting toward pellets as a more reliable alternative, further weighing on lump demand.
Meanwhile, auctions conducted this week by private miners witnessed an extremely poor response from buyers. This lacklustre participation highlights the prevailing weak buying activity in the market, despite selective strength in high-grade ore. Overall, the market remains under considerable strain, with demand highly selective, margins under severe pressure, and recovery still some distance away.
National Mineral Development Corporation (NMDC), Karnataka, has announced list prices of iron ore from its Donimalai mines. Revised prices of fines (-10 mm, Fe 55%) and lumps (10-40 mm, Fe 55%) remained unchanged at INR 2,539/t ($28/t) and INR 2,850/t ($32/t), respectively. Prices include royalty, DMF and NMET.
Rationale
- Two (2) trade via e-auction was recorded for Fe 57% in this publishing window and were not taken into consideration. Hence, the T1 trade category was accorded 0% weightage.
- Nineteen (19) offers and indicative prices were reported, out of which sixteen (16) were considered as T2 trades. These were accorded 100% weightage.
C-DRI prices dip by INR 100/t ($1/t) w-o-w in Bellary: Prices of sponge iron (CDRI) in Bellary fell by INR 100/t ($1/t) w-o-w to INR 24,600/t ($273/t). Market participants attributed the decline to muted buying interest from sponge iron producers, as weak support from finished steel prices continues to pressure realizations.
Karnataka iron ore sales scenario (12-18 December 2025)
Outlook
Low grade iron ore prices is expected to remain weak over the course of December. While high-grade ore may continue to find selective support, weak downstream margins, poor auction participation, and sustained cost pressures are likely to keep prices under pressure.
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