SteelMint weekly low-grade (Fe 58/57%) FoB India iron ore fines price index declined today (i.e 27th Aug) by around $5/t w-o-w to $67/t FoB India. SteelMint’s last week index stood at $72/t FoB India.
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) – No deal for Fe 57% grade from Odisha has been recorded by SteelMint for this week so far and weightage given in the price calculation remained nil.
Price indicators (T2) – In the absence of deals, the average T2 transaction was given a 100% weightage in today’s final price calculation.SteelMint received five indicative prices and offers during the publishing window. All the inputs were considered for price calculation as T2 inputs, with an average price of $67/t FoB India.
Market overview – Chinese demand for seaborne iron ore cargoes has come down as the mills have shifted preference to port-side cargoes, highlighted sources. Chinese spot iron ore fines (Fe 62%) prices after hitting an over six-year high last week fell by around $5/t w-o-w to $123.25/t CFR China yesterday against $128.4/t CFR China on 19th Aug’20.
Indian miners, traders, and exporters kept away from concluding deals considering the current market in the price correction mode.
In the domestic Indian market iron ore fines prices have come down against the last week. Fe 58/57% fines price in Odisha has also come down to around INR 1,600-1,800/t (ex-mines, royalty, NMET, and DMF included).
However, Australia based giant iron ore miner has lowered discount of low-grade fines Fe 56.7% for Sept’20 to 9% against 10% in Aug’20. Despite all this, supply tightness for medium and low-grade fines have been observed at ports and may support the prices in the near term.
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