- Declining CDRI prices dampen buying appetite
- Auctions and direct trades see minimal participation
Domestic iron ore prices in Karnataka’s Bellary region continued to reflect a phase of prolonged stability, underscoring the prevailing caution in the market. Prices of low-grade iron ore fines (Fe 57%) remained unchanged, with BigMint’s weekly index assessed at INR 2,700/t ($30/t) ex-mines, excluding taxes, as of 8 January, the same level as recorded on 1 January. In a similar trend, prices of Fe 62% iron ore also held steady at INR 5,100/t ($57/t) ex-mines, inclusive of taxes, registering no w-o-w movement amid largely unchanged market dynamics and muted trading activity.
Market participants noted that although finished steel and sponge iron prices showed an uptick at the beginning of the week, the momentum failed to percolate down to raw material prices. Any optimism generated by the initial rise was short-lived, as sponge iron prices once again slipped, arising concerns across the value chain. The renewed weakness in sponge prices has reinforced uncertainty in the raw material market, highlighting the fragile nature of demand and the lack of cost support for iron ore.
Despite the broader sluggishness, demand for high-grade iron ore continues to remain firm in the region, primarily due to severely limited availability. This persistent shortage has created a pronounced demand-supply gap, enabling high-grade prices to maintain their resilience even as overall market sentiment remains cautious.
Commenting on the current scenario, a Bellary-based miner said that “buying interest in raw materials remains subdued, as most sponge iron plants have increasingly shifted towards pellets. Lump availability is limited, and the market has largely moved in favour of pellets.” the miner noted.
Echoing similar views, a Bellary-based buyer highlighted “the lack of support from the sponge iron segment, there is no strong pull from sponge iron producers, so we are in a wait-and-watch mode. We are adequately stocked and not actively purchasing at the moment. CDRI prices are not supportive of current cost structures, which has pushed us further towards pellet consumption. We expect market activity to pick up after Sankranti, once operations resume fully post-19 January,” the buyer said.
Reinforcing the cautious outlook, another Bellary-based miner stated that while production is continuing as planned, sales activity remains at a standstill. “We are not selling material either through direct trades or auctions. Instead, we are building inventory and plan to release volumes once prices show a meaningful upward movement,” the miner added.
Rationale
- One (1) trade via e-auction was recorded for Fe 57% in this publishing window and were taken into consideration. Hence, the T1 trade category was accorded 50% 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 fall by INR 300/t ($3/t) w-o-w in Bellary: Prices of sponge iron (CDRI) in Bellary decreased by INR 300/t ($3/t) w-o-w to INR 25,900/t ($288/t) due to subdued demand from steel manufacturers. Buyers are showing reluctance to book material at higher price levels, as adequate volumes were already secured in the previous weeks, limiting fresh procurement requirements. Additionally, manufacturers remain cautious amid uncertain finished steel demand and prefer to wait for further price corrections rather than committing at elevated levels. As a result, spot buying activity has weakened, putting downward pressure on CDRI prices in the Bellary market.
Karnataka iron ore sales scenario (02 -08 January 2026)
Outlook
Iron ore prices in the Bellary region are expected to remain largely range-bound in the near term amid subdued buying interest and cautious market sentiment. Weak support from the sponge iron segment and adequate inventory levels may continue to cap any immediate upside in low-grade prices. However, firm demand for high-grade material, driven by tight availability, is likely to provide price support. Market activity is anticipated to improve gradually after the post-Sankranti resumption of operations, which could bring renewed trading interest.
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