- Higher discount keeps exporters cautious
- Chinese mills prefer pellets over low-grade fines
India’s iron ore export market remained firm this week, supported by a marginal improvement in global iron ore fines prices. However, export activity continued to remain subdued as Chinese steel mills showed limited interest in Indian iron ore fines, primarily due to the wide pricing gap between buyers and sellers.
Rationale
- No 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 sixeen (16) indicative prices in the current publishing window, and ten (10) 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 increased by $2/t w-o-w to $57/t FOB (equivalent to $71/t CFR China) east coast on Thursday, 16 July. However, no deals reported in this publishing window amid the weakened liquidity and bid-offer disparity.
Market participants said Chinese buyers continued to seek higher discounts on Indian low-grade fines, keeping negotiations largely unsuccessful. Discounts for Indian Fe 57% fines continued to hover around 24-25%, whereas Indian exporters maintained offers at 21-22%, resulting in a mismatch in price expectations.
Market scenario
An international trader said, “Chinese mills are actively procuring Indian pellets because of their better blast furnace efficiency and competitive economics. However, inquiries for Indian iron ore fines remain limited as buyers are insisting on deeper discounts than exporters are willing to accept.”
Global seaborne market has strengthened slightly, the improvement has not translated into higher export volumes from India. According to market sources, most exporters were offering Fe 57% fines at around $72-73/t CFR China, while Chinese buyers were unwilling to bid beyond $69-70/t CFR China, preventing fresh transactions from materialising.
Apart from pricing differences, exporters also remained cautious following the dispatch restrictions imposed on Fe 55-60% iron ore by the Directorate of Mines, Odisha, in early July. Several market participants said the regulatory uncertainty has made exporters more conservative in committing cargoes until greater clarity emerges regarding dispatch movements.
A leading exporter commented, “The dispatch-related restrictions have added another layer of uncertainty. Although overseas prices have improved slightly, exporters are reluctant to take aggressive positions until supply movement normalises.”
Market participants added that pellet exports continue to attract comparatively better buying interest than fines, reflecting stronger demand from Chinese steelmakers for higher grade materials. This trend has further diverted attention away from low-grade fines.
In the Chinese market, CMRG collaborated with traders, steel producers, and port terminals to obstruct Fortescue’s shipments, delay certain product categories from 15 July onwards, and discourage additional purchases.
Domestic vs export market
The price gap between export and domestic realisations was recorded at INR 225/t this week. Export realisations (Fe 57%) were at INR 3,075/t ($34/t) this week while domestic realisations (Fe 57%) remained stable at w-o-w at INR 3,300/t ($34/t) exw.
Chinese iron ore fines prices rise w-o-w: The benchmark iron ore fines Fe 61% index inched up by $1/t w-o-w to $100/dmt CFR China on 15 July. Seaborne iron ore prices edged higher despite subdued trading activity, as concerns over freight costs and the possibility of supply disruptions kept sentiment firm. Mills remained watchful after negotiations between a major miner and the company’s union failed to reach an agreement, paving the way for planned strike action. Meanwhile, weaker-than-anticipated Chinese macroeconomic indicators reinforced expectations of further policy stimulus, lending additional support to prices.
DCE iron ore futures stable w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2026 contract rose by RMB 13/t ($2/t) w-o-w to RMB 758/t ($112/t) on 16 July.
Outlook
BigMint expects the export market to remain in a wait-and-watch mode, with both buyers and sellers holding firm to their price expectations. Physical transactions were largely absent during the week as neither side showed willingness to bridge the prevailing price gap. Market participants believe export activity may improve only if discount levels narrow or Chinese buying sentiment strengthens in the coming weeks.
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