SteelMint is launching its weekly iron ore fines (Fe 57%) FoB India price index from today. The inaugural export price is $72/t FoB.
Rationale: The index has been calculated using an average of T1 and T2 price inputs. Transactions confirmed by either a buyer/seller are designated as T1 input while bids, offers and indicative prices are designated as T2 inputs. Both T1 and T2 categories of inputs carry 50% weightage each in price calculation for FOB price assessment.
Transactions (T1) – Three deals for Fe 57% grade from Odisha were recorded by SteelMint having a total quantum of 2,20,000 t which have been concluded for China so far this week for Sep’20 shipments. The average price of these three transactions was $72.2/t FoB.
Details of the transactions held:
Price indicators (T2) – SteelMint received three indicative prices and offers during the publishing window. All the inputs were considered for price calculation as T2 inputs, with an average price of $72/t FoB.
Market overview –
Demand of Indian low grade iron ore fines remained active in China this week.
Export prices of fines are being supported by bullish trend in domestic and overseas markets. Tight supply of iron ore in Odisha due to continued closure of several newly-auctioned mines and monsoon-related disruptions to mining and logistics have led to multiple price hikes by large iron ore producers in Odisha and other states, such as NMDC, OMC and Essel Mining. Domestic demand for ores remain robust from downstream pellet and sponge iron buyers.
Meantime, China’s spot iron ore fines (Fe 62%) index climbed to an over six-year high earlier this week on the back of supply tightness of Australian medium grade fines and robust steel demand outlook due to investments announced in the infrastructure sector.
Iron ore inventory at major Chinese ports increased to 117.15 mn t this week vs 116.85 mn t assessed a week ago, according to SteelHome data. A continued rise in stocks may pressure prices in the near-term, as typically a major proportion of tradable port stocks often comprises low-grade fines.
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