SteelMint: India iron ore export index up marginally even as trade remains muted

SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) increased by $6/t to $32/t FOB east coast India.

Benchmark iron ore Fe 62% fines rallied this week. The spot price of Fe 62% fines increased by $13.5/t on the week on 24 Nov to $103.45/t CFR China as against $89.95/t on 17 Nov. Restocking demand pushed up prices as well as positive sentiments in the futures market.

The low-grade fines export market has also been affected by the depreciation in currency, with the INR standing at 74.5 against the USD compared to 74.1 a week ago.

However, hardly any export deal of low-grade fines from India were witnessed as overall demand in the physical markets have not recovered. The approaching winter, steel production curbs, sintering restrictions, and poor construction demand are expected to weigh on China’s demand for iron ore, further pressurising iron ore export offers.

As per SteelMint data, total iron ore exports from Indian ports for the week (14 Nov-20 Nov) were recorded at 31,882 t compared to nil exports last week.

Rationale:

• Price indicators: No confirmed deal was reported in the current publishing window and hence given 0% weightage under T1 trade.
• SteelMint received seven (7) indicative prices and offers during the current publishing window, and six (6) 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 150.2 mn t last week versus 147.6 mn t a week before, as per data maintained by SteelHome.
  
  
• DCE iron ore futures down: DCE iron ore futures’ Jan’22 contract closed at RMB 611.5/t ($95.74), down RMB 5/t d-o-d.
• Over 50% of material booked at JSW auction: Integrated steel producer JSW Steel had scheduled an auction for 600,400 t of iron ore fines (Fe 55-57%) on 24 Nov’21. The company conducted the e-auction on the MSTC platform, with the base price of the material set at INR 500/t ex-mines. According to latest updates received by SteelMint, 308,100 t of material was booked at the base price.