en.Wedoany.com Reported - The iron ore market in Karnataka, India, continued its sluggish trend over the past week, with limited trading volumes and stable prices for mainstream grades. The persistent weakness in the sponge iron industry and finished steel market continued to exert pressure, curbing any significant rebound in iron ore prices, as most participants adopted a wait-and-see stance due to insufficient downstream procurement.
BigMint's latest assessment shows that the ex-mine price of Fe 57% iron ore fines remained stable week-on-week at INR 2,600/tonne ($27/tonne). Despite ample supply of low-grade ore, demand was extremely weak. Although several miners actively offered, sponge iron producers reduced or halted production, leading to scant buying interest. The supply-demand imbalance further intensified, with thin transactions and downstream buyers only purchasing on a need basis.
The ex-mine price of the benchmark grade Fe 62% iron ore fines remained stable at INR 4,900/tonne ($51/tonne), supported by relatively firm market conditions due to limited supply across the state. Market sources noted that only a few miners can consistently supply high-quality ore, and with several mining leases gradually depleting and ore quality declining, the availability of high-grade fines is further constrained. Tight supply and the absence of selling pressure have maintained price resilience in an otherwise weak environment.
Electronic auctions this week were lackluster, reflecting the market's generally cautious sentiment. Only a few miners organized auctions, with most lots either sold at base prices or failing to attract bids. Buyers adopted a highly selective procurement strategy, prioritizing reputable miners and stable ore quality over broad participation in bidding. This cautious approach dampened market liquidity and trading volumes. Additionally, although the monsoon season has begun, rainfall has not yet significantly impacted local mining operations or ore shipments.
A miner in Bellary told BigMint that the market is under immense pressure, with the supply-demand imbalance for low-grade ore widening. Many independent sponge iron plants have reduced or halted production due to thin profit margins. Meanwhile, lump ore users are increasingly demanding consistent quality, but variations in ore quality across different mining leases make maintaining uniform grades difficult. As a result, many buyers are gradually shifting to pellets, which offer better consistency and operational efficiency.
During this reporting window, no transactions were concluded for the Fe 57% grade through electronic auctions, resulting in a 0% weight for the T1 transaction category. A total of 16 quotes and indicative prices were collected, of which 11 were considered T2 transactions and received a 100% weight.
The price of Bellary sponge iron (C-DRI) fell by INR 100/tonne ($1/tonne) week-on-week to INR 26,000/tonne ($272/tonne), mainly dragged down by weak demand from downstream steel mills, low finished steel prices, and slow order bookings. Narrowing production margins prompted buyers to purchase on a need basis, reducing trading activity.
Looking ahead, the Karnataka iron ore market is expected to remain under pressure in the short term. Weak demand from sponge iron producers and low finished steel prices will continue to suppress buying interest. Low-grade fines will face ongoing demand challenges due to ample supply, while benchmark-grade ore may receive relative support from tight supply. Unless there is a significant improvement in downstream steel demand, prices are likely to fluctuate within the current range.
