- No deals from India amid bid-offers disparity
- Buyers seek 24-26% discounts for Fe56-57% fines
- W-o-w dip in inventory levels at Chinese ports
Indian iron ore fines export prices remained range-bound this week due to lack of deals in the seaborne market. Buyers demanded 24-26% discount on the global index but prominent exporters remained cautious and opted for a wait-and-watch mode before concluding deals.
BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $1/tonne (t) w-o-w to $57/t FOB east coast on 8 August 2024. No export deal was heard for Fe57% as major sellers have remained cautious amid the lower price level. Some sellers expected a premium on single mine cargo but failed to fetch buyers’ interest due to the downtrend in the market in recent days.
Sources said that demand had been witnessed from Chinese buyers as mills there purchased lower and medium-grade fines amid low steel margins but bids from them were very low. However, no bulk cargo was purchased from India amid the bid-offer disparity.
An iron ore exporter said: “Buyers were not ready to buy at the sellers’ offers as they wanted to save the import margin amid lower steel demand in China but following the current market dynamics, it is not easy for the exporters to sell at such lower prices. Sellers are looking to offload material at $72-73/t CFR China in the export market which is preventing deals from India.”
Another exporter mentioned that the market will likely continue to see an increase in Brazilian low-alumina, high-silica supplies being shipped to China due to favourable discounts offered to mills. At the same time, the availability of Indian fines is expected to decrease as exports become more limited amid the lower prices against the expectations of Indian sellers.
Price indicators
- No confirmed deal was reported from the East Coast this week and taken into price calculation under T1 trade and given 0% weightage in the index calculation. For detailed methodology Click here.
- BigMint received eighteen (18) indicative prices in the current publishing window and twelve (12) were considered for price calculation as T2 inputs and given 100% weightage.
Iron ore inventories in China’s major ports dropped by 1.3 mnt to 150.4 million tonnes (mnt) on 8 August compared to the last week, according to SteelHome data.
Factors impacting the seaborne market-
- Iron ore spot prices stable w-o-w: The benchmark iron ore fines remained stable w-o-w at $101/t CFR China on 7 August. The prices remained range-bound amid weaker market fundamentals, including increased Chinese imports surpassing forecasts, missed export growth expectations, and a worsening situation for steel mills facing production cuts and losses.
- Portside offers in China down w-o-w: Portside offers of Indian iron ore fines (Fe57%) in China dropped by RMB 25/t ($3.5/t) w-o-w on 8 August. Offers were recorded at around RMB 565/t ($79/t) at Qingdao Port, including all import taxes and port charges. D-o-d, portside prices decreased by RMB 10/t ($1/t) today.
- DCE futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2024 contract decreased by RMB 19.5/t ($3/t) w-o-w to RMB 729.5 ($102/t) on 8 August. Meanwhile, futures dropped by RMB 19.5/t ($3/t) d-o-d against RMB 749/t ($105/t) yesterday.
Outlook
Seaborne iron ore export prices are expected to remain range-bound following the bid-offer disparity amid the lower steel margins in the domestic China market. However, sources added that the mills’ interest in the lower grade fines and drop in the Chinese port inventory level may support the Indian fines deals in the seaborne market.
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