- Iron ore export at around 23-27% discount
- Chinese ports iron ore inventories rise w-o-w
India’s low-grade iron ore fines export market continued to witness subdued sentiment as prices remained under pressure due to elevated discount levels and weak buying interest from Chinese importers. Limited demand from China, coupled with high port inventories, has restrained fresh transactions in the seaborne market.
Rationale
- One deal for Fe 57% was recorded during this publishing window and was not taken under prices calculation. Therefore, T1 trade was given 0% weightage in the index calculation. For the detailed methodology, click here.
- BigMint received sixteeen (16) indicative prices in the current publishing window, and fifteen (15) were considered for price calculation as T2 inputs and given the rest 100% weightage.
Prices, deals
BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index dropped by $0.5/t w-o-w to $54/t FOB (equivalent to $67/t CFR China) east coast on Thursday, 2 July. One export deal of 55,000 t iron ore fines (Fe57%) export deal was recorded at 69/t CFR China recently concluded from Vizag port.
An Odisha-based miner concluded an export deal for 110,000 t of Fe 57% fines at $71-72/t CFR China yesterday, further reflecting strong demand for single-mine material.
Trading activity was largely absent as exporters adopted a wait-and-watch approach while buyers continued to seek steeper discounts. Several miners were heard offering cargoes at discounts of around 23-27% to benchmark prices but due to lower bids in sea market, deals were absent in this publishing window from east coast.
Iron ore inventories at 34 major Chinese ports stood at 155.5 (excluding pellets) mnt as of 24 June, increased by 3 mnt w-o-w.
Market scenario
According to international traders, buying inquiries from Chinese buyers remained muted throughout the week. As a result, several Indian exporters have shifted to a wait-and-watch approach instead of accepting lower-priced deals.
An international trader said, “Chinese buyers are showing limited interest in fresh cargoes as mills are operating cautiously. Current discounts are still high, making it difficult for Indian exporters to conclude new transactions.”
Market sources said discounts for Indian 57% Fe fines are currently hovering around 25-27%, while buyers are bidding for 55% Fe fines at even steeper discounts of 32-33% in the seaborne market. The wide discount levels have continued to weigh on exporters’ realizations.
The pressure intensified after an Australia-based mining company announced the July pricing for its low-grade 56.5% Fe special fines, offering an 18% discount, compared with 18.5% in June. Although the reduction is marginal, market participants believe the pricing benchmark has prevented Indian exporters from narrowing their discount offers.
Australian cargoes continue to set the benchmark for low-grade fines. Since their discounts remain attractive, Indian suppliers have little room to improve their pricing despite lower availability during the monsoon.
Meanwhile, inventories at major Chinese ports continue to remain at elevated levels, limiting the urgency for steel mills to procure additional spot cargoes. Mills are largely relying on existing inventories and are purchasing only to meet immediate production requirements.
An Indian exporter commented, “Most exporters are holding back cargoes rather than selling at current discount levels. We expect demand to improve only after inventories at Chinese ports begin to decline.”
With the onset of the monsoon season in India, exporters are also evaluating logistics and shipment schedules before committing to fresh sales. Market participants expect export activity to remain limited over the coming weeks.
Domestic vs export market
The price gap between export and domestic realisations was recorded at INR 550/t this week,. Export realisations (Fe 57%) were at INR 2,750/t ($30/t) this week while domestic realisations (Fe 57%) inched down by INR 50/t w-o-w at INR 3,300/t ($35/t) exw.
Chinese iron ore fines prices stable w-o-w: The benchmark iron ore fines Fe 61% index remained stable w-o-w at $98/dmt CFR China on 1 July. The softness in iron ore prices was primarily driven by mounting pressure on mills’ margins following the ninth round of coke price hikes, which led many mills to adopt a cautious procurement approach. Weak profitability prompted several Chinese steelmakers to either announce maintenance shutdowns or consider production curbs for July, raising expectations of lower raw material consumption in the coming weeks.
DCE iron ore futures down w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2026 contract remained stable w-o-w at RMB 747/t ($110/t) on 2 July.
Outlook
BigMint expects India’s low-grade iron ore fines export prices are likely to remain range-bound in the near term, with the possibility of only a few spot transactions. Fresh deals are expected to remain scarce during the first half of July, unless Chinese demand improves significantly or inventory levels at Chinese ports begin to ease.
Leave a Reply