SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $3/t, w-o-w, to $27/t FOB east coast India.
The spot price of benchmark iron ore Fe 62% fines decreased by $23.2/t, w-o-w, on 3 Nov’21 to $96.45/t CFR China as against $119.65/t a week ago. DCE iron ore futures’ Jan’22 contract closed at RMB 589.5/t ($92.12) (-RMB 9), d-o-d.
Seaborne iron ore prices fell below $100/dmt for first time since 22 Sep on weaker Chinese demand outlook in the winter. Prices fell tomulti-month lows on 2 Nov, dragged by the decline in the futures market on the back of steel production cuts, power issues, falling steel demand, and oversupply of iron ore.
Sintering controls, steel production curbs and weakening downstream steel demand in winter saw portside prices sink and buyers bid lower for seaborne spot cargoes. Premium and discount levels weakened for iron ore fines.
For the remainder of this year, the market is expected to see a fall in steel prices and weak margins will contribute to lower demand for raw materials.
China’s steel industry is making continuous efforts to keep its 2021 crude steel output within 2020 levels since Jul’21, serving the twin goals of capping iron ore prices and meeting the country’s broader objective of reducing carbon emissions. China in Oct released a new carbon peaking action plan that called for the steel industry to continue capping its iron and steel making capacity, especially around Beijing, Tianjin and Hebei regions.
A major Australian iron ore miner has increased the sub-grade iron ore discount for super special fines (SSF) amid the continued reduction in Chinese buying interest, as per latest reports. According to sources, the iron ore miner has increased the discount for SSF fines for Nov to 42% against 40% in Oct.
Rationale:
- Price indicators- No confirmed deal was reported in the current publishing window and hence given 0% weightage under T1 trade.
- SteelMint received three (3) indicative prices and offers during the current publishing window, and all were considered for price calculation as T2 inputs, given weightage of 100%.
Market highlights:
- Iron ore stocks rise at Chinese ports: Iron ore inventory at major Chinese ports increased to 142.3 mn t last week as against 140.2 mn t a week ago, as per data maintained by SteelHome. Iron ore inventories at major Chinese ports have been building up since Jul, amid the production cuts needed to meet China’s 2021 crude steel targets.
- OMC low-grade iron ore auction receives moderate response: OMC conducted e-auction for 50,000 t of iron ore fines (Fe 58%) from its Kora mines. The miner fetched bids for 35,000t of material at the base price of INR 4,000/t ex-mines, inclusive of royalty, DMF and NMET.
- Freight rates drop: Freight rates for 50,000-55,000 t export vessels from India’s east coast (Paradip) to China have dropped by $7/t to $20/t this week.
Leave a Reply