Indian low-grade fines export index up by $8/t w-o-w on global price rally

SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export India index increased sharply by around $8/t. Index stands at $88/t FoB east coast India. Market participants cited strong demand for high-grade ore from Chinese mills amid restocking before New year Chinese holidays. Most of the mills in China are preferring high grade fines and lumps for better cost efficiency.

However demand for low grade ore remained moderate, sources reported.

Price indicators – No confirmed export deal was heard so far this week. Therefore, it was not considered for calculation of index and weightage given 0%. However, the weightage of T1 transferred to calculation of T2 inputs.

SteelMint has received five indicative prices, offers and bids during the publishing window and all were considered for price calculation as T2 inputs, with an average price of $88/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.

Market highlights –

• Chinese spot iron ore fines index nears $160/t CFR mark – Chinese spot iron ore fines (Fe 62%) increased significantly by around $20/t on a weekly basis and stood at $ 158.25/t CFR China today against $137.8/t a week before. Prices already hit nine years high yesterday. On a daily basis spot index increased around $7.5/t today against $151.25/t yesterday. Prices are hovering at high levels backed by strong demand and supply constraints.
• DCE May’21 futures contract price rises- Dalian iron ore futures’ contract of May’21 closed at RMB 971 today against yesterday’s close of RMB 918.5.
• Iron ore stocks at Chinese ports fall further – Iron ore inventory at major Chinese ports have been decreasing since last one month. Iron ore inventories fell by around 3 mn t this week to 125.85 mn t as per data maintained by SteelHome.
• SteelMint’s assessment for Indian low-grade iron ore fines (Fe 57%) stands at INR 3,000/t (ex-mines, incld. Royalty, DMF and NMET).