India: Iron ore export prices dip $1/t w-o-w following festive break

• Decline in Chinese restocking hinders market momentum
• Lower base prices at OMC auction to help trim sourcing costs

The Indian iron ore fines export market remained largely rangebound this week as trading activity slowed during the festive period, keeping several exporters away from the market. Despite limited deals in the seaborne market, buying inquiries from Chinese mills continued to surface, indicating steady underlying demand.

Prices, deals

BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index fell by $1/tonne (t) w-o-w to $70/t FOB east coast on 23 October.

According to market participants, no major export deals were reported during the week; however, sentiment remains cautiously optimistic for the near term. “The market was quiet due to Diwali holidays, but inquiries from Chinese buyers have been consistent. We expect deals to pick up once regular activity resumes after the break,” said a coast-based exporter.

Exporters mentioned that discounts for Fe 57% fines remained stable at around 14-15% against the benchmark index. “The discount levels have been steady, but we are hearing that some exporters are aiming for slightly lower discounts as they anticipate a firmer trend in the coming weeks,” noted another trader active in the eastern region.

Market scenario

Market participants highlighted that with major exporters now returning to operations after the festive break, trading volumes could gradually improve. “We may see some movement in the next few sessions as buyers look to secure cargoes for December shipments,” said a source from a major mining company.

Overall, while festive lethargy weighed on this week’s activity, steady Chinese interest and stable discount levels suggest the Indian iron ore fines export market could regain momentum in the short term.

Sources said that buyers procured low-grade fines from the latest Odisha Mining Corporation (OMC) auction after the miner reduced its base prices. This is expected to help suppliers manage sourcing costs.

Chinese spot prices rise w-o-w: The benchmark iron ore fines index dropped $1/t w-o-w to $105/t CFR China on 22 October. Trading activity strengthened, particularly in blend fines. Rising blend fines costs and slower post-holiday restocking put pressure on buyers. Moreover, steel margins remained tight, and blending ratios were adjusted to cope with lower productivity.

Rationale

• No major deals for Fe 57% were recorded during this publishing window and taken for price calculation. Therefore, T1 trade was given 0% weightage in the index calculation. A few deals were already factored into Monday’s assessment. For the detailed methodology, click here.
• BigMint received Seventeen (17) indicative prices in the current publishing window, and all were considered for price calculation as T2 inputs and given 100% weightage.

Iron ore inventories at major Chinese ports recorded at 133.6 mnt on 23 Oct, inching up by 0.2 mnt w-o-w as per data published by SteelHome.

Outlook

BigMint’s notes that with iron ore production along the east coast returning to normal, more export deals are expected in the coming days. This is likely to strengthen the market.