- Seasonal demand pickup fails to materialise
- Sluggish buying weighs on market sentiment
Domestic low-grade iron ore fines (Fe 57%) prices in Karnataka’s Bellary region dropped by INR 100/t ($1/t), with BigMint’s weekly index at INR 2,700/t ($30/t) ex-mines, excluding taxes, as of 24 December, compared to the previous assessment on 18 December. In contrast, prices of Fe 62% remained unchanged at INR 5,100/t ($57/t) ex-mines, inclusive of taxes, showing no w-o-w change.
Persistent sluggish buying across the region has weighed heavily on prices, keeping overall market sentiment cautious. Although the sponge iron segment showed intermittent signs of improvement, these gains proved short-lived and inconsistent. Weak downstream demand continue to limit the segment’s ability to meaningfully support raw material prices, leaving the broader iron ore market under sustained pressure.
Auction activity further mirrors the prevailing demand slowdown, with most sales continuing to go unsold, barring a few isolated instances. The lacklustre response underscores the highly cautious and risk-averse stance adopted by buyers, who remain reluctant to commit amid uncertain market conditions. Market participants noted an absence of urgency or aggressive bidding, reinforcing the bearish undertone across the trade.
A Bellary-based seller highlighted that “current market conditions are significantly weaker than the same period last year, with momentum failing to build despite the onset of the winter season – traditionally a supportive phase for demand. The unexpected softness has dampened trade sentiment and raised concerns over a more prolonged demand slowdown in the region.”
Adding to the shift in raw material dynamics, sponge iron producers are increasingly favouring pellets over lumps, as the latter have become economically unviable under prevailing cost and margin pressures, according to market sources.
Meanwhile, NMDC rolled over its base prices for the auction held on 23 December 2025. Despite the broader weak market environment, the auction received a decent response, with the entire offered quantity of both lumps and fines getting booked at base price suggesting selective buying support at realistic price levels.
Rationale
- One (1) 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.
- Fourteen (14) offers and indicative prices were reported, out of which twelve (12) were considered as T2 trades. These were accorded 100% weightage.
C-DRI prices rise by INR 750/t ($8/t) w-o-w in Bellary: Prices of sponge iron (CDRI) in Bellary increased by INR 750/t ($8/t) w-o-w to INR 25,350/t ($282/t). Market sources indicated that prices remained supportive during the period, driven by consistent buying interest from local steel manufacturers. Demand showed gradual improvement, particularly from western India–based manufacturers, which helped sustain market sentiment. At the same time, input costs for sponge iron production increased, especially key raw materials, exerting upward pressure on production costs. In response to the rising cost environment and steady demand conditions, sponge iron manufacturers attempted to revise prices upward, providing further support to Bellary CDRI sponge prices in the market.
Karnataka iron ore sales scenario (19-24 December 2025)
Outlook
Low-grade iron ore fines prices in Karnataka are expected to remain broadly stable in the near term, with limited downside, as current levels are already at the lower end of the spectrum. While buying activity remains cautious, the absence of aggressive selling and the gradual firming in sponge iron prices could help cushion iron ore prices against any sharp correction.
Leave a Reply