- Trades pick up amid pre-monsoon restocking
- NMDC iron ore auctions receive active response
Karnataka’s domestic low-grade iron ore fines (Fe 57%) prices increased significantly this week in Bellary. BigMint’s weekly index for low-grade fines stood at INR 3,100/tonne (t) ($36/t) ex-mines Bellary (excluding taxes), an increase of INR 350/t ($4/t) w-o-w.
Meanwhile, the Fe 62% fines index was assessed at INR 5,100/t ($60/t) ex-mines Bellary, including taxes, unchanged, w-o-w. Although some offers were heard at higher levels of INR 5,400/t ($63/t), although no transactions were concluded at these elevated prices.
Notably, the National Mineral Development Corporation (NMDC) in Karnataka re-entered the merchant market by offering low-grade iron ore fines (Fe 57%) through e-auction after a considerable hiatus. According to sources, NMDC was the sole active supplier of this specific grade at the time.
The miner’s iron ore auction from Donimalai mines on 27 May received active response. According to sources, the entire quantity of 16,000 t lumps (10-40 mm, Fe 57%) and 32,000 t fines (Fe 57%) got booked at base prices of INR 4,345/t ($51/t) and INR 3,712/t ($43/t), respectively. Another auction from its Kumaraswamy mines on 28 May witnessed bookings of 48,000 t lumps (Fe 62.25%) at 17% premium over INR 5,505/t ($64/t) and 128,000 t fines (Fe 58.13-59.04%) at the base price of INR 3,699-3,899/t ($43-46/t). Prices are on ex-mines basis and include royalty, DMF, and NMET.
Additionally, a few miners remained absent from the market as they are still awaiting their Consent to Operate (CTO) for the current fiscal year. Echoing this situation, a Bellary-based miner told BigMint, “We have yet to receive the DMG’s consent to operate – production can only begin once that approval is granted.”
Another source from the region said, “NMDC was the sole supplier offering this grade, with no other miners participating. The same offer price remains applicable. Additionally, when direct mine supplies are unavailable, market participants are sourcing material from beneficiation plants to meet their requirements.”
Rationale:
- One (1) trade was recorded via e-auction for Fe 57% in this publishing window, so T1 trade received 50% weightage.
- Fourteen (14) offers and indicative prices were reported, out of which nine (9) were considered as T2 trades. These were accorded 50% weightage.
However, falling sponge iron prices have raised some concerns among the market players. BigMint’s sponge CDRI prices in Bellary declined by around INR 700/t ($8/t) w-o-w, driven by subdued market sentiment. Sluggish demand in recent weeks led to stock accumulation, prompting sellers to reduce prices under inventory pressure.
Karnataka iron ore sales scenario (23-29 May 2025)
Outlook
Domestic low-grade iron ore prices in Karnataka are expected to stay firm in the near term, driven by a recovery in trade activity amid active pre-monsoon restocking. A few miners who were previously inactive have scheduled auctions in the coming weeks, and market participants are closely watching these developments.
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