India: Iron ore fines export index slides to 9-month low

Decreased buying from China amid steel production cuts in that country continue to drag down India’s iron ore export offers. SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $4/t w-o-w to $76/t FoB east coast India.

“Bookings for Indian cargoes of low-grade iron ore remained largely absent. High freight rates and quarantine restrictions are adversely affecting bookings for Indian cargoes,” said a global trader.

With iron ore prices plummeting substantially and the seller having to bear the demurrage charges at discharge ports, the realisation of iron ore miners exporting 57% grade ore has moved down drastically. This may discourage Indian miners from exporting and hence exports from India may see increasing decline in volumes in the days ahead.

“Sellers are holding back offers. Today the spot price of iron ore crashed. The Fe 62% fines index was reported to have fallen by $6/t d-o-d to $195/t CFR China. However, it seems, prices have fallen quite a lot and we may see some trade happening from next week onwards,” highlighted an Odisha-based miner.

Rationale:

• Price indicators- No confirmed deal was reported in this publishing window and hence given 0% weightage under T1 trade.
• SteelMint has received ten (10) indicative prices and offers during the current publishing window, and four (04) were considered for price calculation as T2 inputs, being given a weightage of 100%.

Market highlights:

• Iron ore stocks dropped at Chinese ports – Iron ore inventory at major Chinese ports decreased to 128.25 mn t last week compared with 129.5 mn t in the week before last, as per data maintained by SteelHome.

  

• DCE iron ore futures continue downtrend: DCE iron ore futures Sept contract fell by RMB 36 ($6) d-o-d today to RMB 1,102/t.
• Freight rates stable w-o-w- Freight rates for 50,000-55,000 t export vessels from India’s east coast (Paradip) to China remained stable at $27/t w-o-w. However, 21-28 days’ quarantine and demurrage charges remain matters of pressing concern adding to costs.