- Trades conclude at lower levels
- Governor calls for MRT re-review
Domestic low-grade iron ore fines (Fe 57%) prices in Karnataka’s Bellary region witnessed a marginal drop this week. BigMint’s weekly index for low-grade fines (Fe 57%) decreased w-o-w by INR 50/t ($1/t) to stand at INR 2,900/tonne (t) ($34/t) ex-mines Bellary (excluding taxes).
Similarly, the Fe 62% fines index also fell to INR 4,800/t ($56/t) ex-mines Bellary, inclusive of taxes, a fall of INR 150/t ($2/t), w-o-w. Additionally, some offers were seen at higher levels, that is INR 5,400/t ($62/t). However, trades remained inconclusive as buyers deemed the prices too high given the current market conditions. In the same line, one of the major seller from the region mentioned, “The prices we quoted in our recent auction were considered high by the buyers, leading to no successful sales.”
Additionally, reflecting on the recent auction results, a miner based in Bellary commented, “Offers remain unchanged. Although a substantial quantity was sold in our recent auctions, the bids were significantly lower compared to previous ones.”
The Karnataka Mineral Rights and Mineral Bearing Land Tax Bill 2024 continued to be the most pressing issue within the domestic minerals industry. The potential implications of the bill have raised concerns about its severe impact on mineral taxes, prices, and the broader economic landscape.
In a recent development, Karnataka Governor Thawar Chand Gehlot has returned the state government’s plea for the Mineral Rights and Mineral Bearing Land Tax Bill. During a meeting held yesterday, the governor called for a re-verification of the mineral rights taxation (MRT) bill, along with several other bills on various other agenda, sources informed BigMint.
Commenting on the development, a buyer from the region informed BigMint, “With the heavy charges proposed by the state government, steel mills appealed to the governor to reconsider the bill. Current market conditions, marked by sluggish sentiments, weak demand, and low production levels towards the quarter-end, have already squeezed margins. Buyers are now hoping for positive news, such as that the charges should be applied from the upcoming auctions, allowing them to decide whether to continue sourcing material from the region. Miners must maintain competitive pricing to secure trades.”
On the other hand, a major miner stated, “The governor may delay the bill for a few months by requesting a re-verification but cannot outright reject it.”
Rationale
- No trade was recorded in this publishing window. Hence, the T1 category was accorded 0% weightage.
- Fourteen (14) offers and indicative prices were reported, out of which eleven (11) were considered as T2 trades, receiving 100% weightage.
Karnataka iron ore sales scenario (17-23 January, 2025)
Outlook
Domestic low-grade iron ore prices are expected to remain volatile amid the current market dynamics in the region. Meanwhile, the market is closely watching the potential relief that the relaxation of MRT bill reverification might bring following yesterday’s meeting with the governor.
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