SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) increased marginally by $3/t w-o-w to stand at $85/t, FoB east coast India.
As per reports, demand for low-grade fines remained subdued. The surge in coke prices in China weighed on low-grade fines prices due to the high impurity content of silica and alumina in low-grade fines, which require higher volumes of metallurgical coke for smelting.
Also, the onset of the rainy season and weakening steel margins in China continue to adversely impact the demand for low-grade fines. Some traders in China are expecting sintering cuts to continue throughout Jul’21 which, in turn,are expected to weaken demand for low-grade iron ore further.
As steel production restrictions in China intensified in late-Jun ahead of the centenary celebrations of the Chinese Communist Party, switching of sintering blends to low-grade fines was inevitably hampered.
“I haven’t offered a cargo since the past two-three weeks. Still stuck with the previous orders due to delay in shipments, demurrage and quarantine concerns in China. There are very limited bids”, highlighted an Indian iron ore miner.
Hardly any deals have been reported in the current publishing window. A couple of deals for low-grade iron ore fines, however, were concluded at $110-112/t, CFR China,a market participant informed.
A major Australian iron ore miner has increased the discount for sub-grade iron ore fines, or SSF (super special fines), on the back of falling overseas demand and steel margins in China. According to sources, the company has increased the discount for SSF fines for Jul’21 by 22.5% against 21% in Jun.
Rationale:
- Price indicators- One deal was reported in this assessment period but not taken into consideration for the calculation, being given 0% weightage under T1 trade. The trade was not taken into consideration since it was done through Vizag port.
- SteelMint has received ten (10) indicative prices and offers during the current publishing window, and five (05) were considered for price calculation as T2 inputs, being given a weightage of 100%.
Market highlights:
- Iron ore stocks at Chinese ports pick up- Iron ore inventory at major Chinese ports increased by around 0.5 mn t to 124.45 mn t this week compared with 123.95 mn t in the previous week, as per data maintained by SteelHome.
- DCE iron ore futures up slightly : Dalian Commodity Exchange (DCE) iron ore futures Sept contract closed at RMB 1,166/t ($180) (+RMB 1). Iron ore futures on the DCE remained supported on news of possible crude steel output curbs in China’s Anhui province in the Jul-Dec’21 period, as per SteelMint reports.
- Freight rates stable w-o-w- Freight rates for 50,000-55,000 t export vessels from east coast India (Paradip) to China are almost stable at $27/t.
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