Imported Iron Ore Offers to India Rise in Line with Global Prices

Offers for imported lump from South Africa have moved up by about USD 8/MT.

South African Kumba lump offers which were around USD 62/MT, CIF India have moved up and are at around USD 70-71/MT, CIF India. Chinese spot iron ore prices have strengthened by USD 5/MT in last 2 weeks.

Rising global iron ore prices have shifted the attention of importers towards domestic market. JSW Steel, who remained a prominent importer of iron ore in last fiscal, has also increased its procurement from NMDC Chhattisgarh mines, thus reducing imports.

India has imported about 46,100 MT iron ore in Aug’15 (till 11 Aug’15). Apart from this, there is only a single import shipment of iron ore which is at anchorage.

Status of Iron Ore Imports Vessels to India in Aug’15

Qty in MT
N/A: Not Available
Provisional data
Data updated till 11 Aug’15
Source: SteelMint Research, Customs

Recently, two Odisha based merchant miners have cut iron ore prices by upto INR 400/MT. Reduction in domestic iron ore prices will reduce the viability of imports. Thus, iron ore imports to India are likely to remain low this month. Last month imports stood at 652,500 MT.

Spot Lump Premium Rise; Imports Turn Further Costlier

Strict environmental regulations have forced Chinese steel mills to use high quality material such as lump, following which, lump premium has also increased. Spot lump premium which was at 0.115/dry MT unit last week has moved up by 15% to 0.1325/dry MT unit this week.

Chinese traders are anticipating lump premium to reach 0.15/dry MT unit in the coming days looking at its strong demand from steel mills, who are trying to produce as much crude steel as possible before they are ordered to shut down their mills.

Thus, over increasing seaborne lump, premium offers for imported lump will also move up.