SteelMint’s weekly index for low-grade India iron ore fines (Fe 57%) exports increased by $7/t to $35/t FOB east coast India. Although the global benchmark Fe 62% fines index has witnessed some recovery, demand for low-grade ore is still subdued and export deals from India are yet to regain momentum.
The spot price of benchmark iron ore Fe 62% fines increased w-o-w on restocking needs ahead of holidays and stood at $122.60/t CFR China yesterday as against $110/t a week ago. DCE iron ore futures’ May’22 contract closed at RMB 693.5/t ($108.87/t) on 22 Dec’21, stable d-o-d.
The recent hike in iron ore prices comes on the back of high paper market prices despite bearish sentiments prevailing. The movement of iron ore prices is largely linked to the price of steel products and steel mill margins. It is likely that market anticipation of better steel mill margins based on improved profit levels of some steel products is keeping prices high.
Iron ore port inventory in China continues to rise and some potential buyers were reluctant to purchase due to the potential price downside and the steep negative import margins. Iron ore inventory at major Chinese ports increased to 157.5 mn t last week as against 156 mn t a week before, the highest since mid-Jul’20, as per SteelMint’s compilation of data supplied by SteelHome.
SteelMint data reveals that total iron ore exports from Indian ports for the week (12-18 Dec’21) continued to remain nil for the third consecutive week.
Though global high-grade fines index has recovered by $10-15/t w-o-w, low-grade fines prices haven’t shown much momentum. There are very limited offers at present from India as physical trades are yet to pick up despite a recovery in the futures market, highlighted traders.
Leave a Reply