Imported Iron Ore Offers to India Move Up

Amid rise in global iron ore index and lump premium, offers for imported lump to India have shown an uptrend and have gone up by USD 4-5/MT W-o-W.

Offers for imported South African Kumba lump are around USD 70-72/MT, CIF India for shipments to arrive in Oct’15. Offers have moved up over increase in global iron ore index and increase in seaborne lump premium. Limited stock of iron ore at Chinese ports has given a lift to the spot iron ore prices.

Seaborne iron lump premium up by 40% W-o-W

Seaborne iron lump premium has moved up by USD 0.005/dry MT unit to USD 0.13/dry MT unit this week. Last week, spot lump premium was assessed at USD 0.125/dry MT unit.

However, Chinese steel makers seemed resistant booking lump in large quantities as its available substitutes (like sinter) are comparatively cost-effective.

Price cut in domestic market and devalued INR have made imports less viable. Importers seem to be resistant for booking shipments as recent price cut by NMDC (by INR 100-400/MT on lump and INR 80/MT on ROM) and Odisha merchant miners (upto INR 400/MT in lump and INR 200/MT on fines) have made domestic iron ore further preferable than imported one.

*till 11 Sept’15

Talking about iron ore vessels lined up for the month, there is only single vessel of KIOCL for import of 72,500 MT fines which is expected to arrive by 16 Sept’15. Backed by cheaper domestic prices and ample availability, iron ore imports to India have dropped in this fiscal.