- Iron ore fines, futures prices drop w-o-w
- Discount to offers at around 23-25%
- Bids from Chinese buyers drop for low-grade ore
BigMint’s weekly Indian low-grade iron ore fines (Fe 57%) export index fell by $2/t w-o-w to $66.5/tonne (t) FOB east coast on 30 May 2024. The Indian seaborne market continued to face pressure; only a few exporters finalised deals while others remained cautious. The discount was at around 23-25% for Indian lower-grade fines.
Around 55,000 t of standard grade Fe 57% fines cargo was concluded at $81-82/t CFR China by an Indian miner in this publishing window but it was not confirmed by the time of publishing this article. A major miner in Odisha has also concluded 4-5 cargos (around 275,000 t) of Fe 54% fines at around $69/t CFR China a few days back.
Iron ore fines export offers remained sluggish this week following the drop in iron ore fines and futures prices. Buyers looked at a slightly larger discount to finalise transactions. Therefore, a few deals are still under negotiation.
An exporter commented: “Buyers’ bids dropped compared to last week as a discount on IODEX increased which caused Indian sellers to lower interest to sell material in the seaborne market. A few miners were interested in exporting the material as they have enough material at ports. Following sluggish market sentiments over the last couple of days, traders have remained away from the market.”
Prices of domestic Indian iron ore have also risen sharply post-OMC auction concluded last week. Some traders have stated that it has become difficult to buy and export the material due to high domestic prices and lower bids from buyers, leaving no margins for traders. Therefore, they are now in a wait-and-watch mode.
However, sources have reported that some large exporters are consistently selling their material in the export market because they have ready-to-load cargoes and are offering slightly higher discounts compared to the market for Chinese buyers.
Price indicators
- No confirmed deals were reported this week and not taken into price calculation under T1 trade and given 0% weightage in the index calculation. For detailed methodology Click here.
- BigMint received Twenty-one (21) indicative prices in the current publishing window and nineteen (19) were considered for price calculation as T2 inputs and given a 100% weightage.
On the other hand, portside offers in China of Indian iron ore fines (Fe57%) decreased by RMB 35/t ($5/t) w-o-w on 30 May. Offers were recorded at around RMB 650/t ($90/t) at Qingdao Port, including all import taxes and port charges. Meanwhile, prices dropped RMB 15/t ($2/t) d-o-d amid the drop in future prices and weak market sentiments throughout the day.
A Chinese analyst has reported that there is high port stocks in China, and steelmakers are seeking to purchase cheaper materials amid a drop in steel prices.
Iron ore inventories at China’s major ports increased by 0.85 mnt to 145.5 mnt on 30 May compared to the last week, according to SteelHome data.
Other highlights:
- Iron ore spot prices down w-o-w: The benchmark iron ore fines index decreased w-o-w by around $2/t to $119/t CFR China on 29 May. Oversupply of iron ore and high stock levels at Chinese ports continue to suppress prices. Landing margins have recently been poor, leading some steel mills to restock only as needed to maintain favourable production margins.
- DCE futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2024 contract decreased by RMB 31.5/t ($4/t) w-o-w to RMB 865 ($120/t) on 30 May. Additionally, prices dropped by RMB 26/t ($4/t) d-o-d today.
- Shipments marginally down w-o-w: India’s iron ore export shipments were recorded at 605,350 t in the fourth week of May, compared to 722,252 t in the previous week, as per vessel line-up data maintained with BigMint.
Outlook
The seaborne export market for Indian iron ore fines is expected to remain volatile amid higher discount demand from Chinese buyers along with higher portside stocks.