- Miners offer superior grades at premium
- Other exporters opt to wait and watch
The Indian iron ore fines export market witnessed a decline of $2-3/tonne (t) this week, driven by a drop in global fines prices and deteriorating market sentiment. The bearish trend was further reinforced by speculation around steel production cuts in China, which dented buying interest and weighed on demand for Indian material.
Prices and deals:
BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index fell by $3/t w-o-w to $59/t FOB east coast, India, on 29 May. Exporters dealing in Fe57% fines reportedly offered discounts of 20-21% compared to the global index, which is largely similar to last week’s.
Around 160,000 t of fines (Fe57%) export deals were recorded by BigMint in this publishing window while other parties opted for a wait-and-watch mode amid the declining prices trend. Another 120,000 t of fines export deals recorded this week but are yet to be confirmed by the exporters.
Exporters took a cautious approach in securing new deals, as market dynamics continued to signal a downtrend. While a few trades were reported earlier in the week at higher index levels, participants now appear hesitant to take fresh positions.
As per reports, the Chinese market is clouded by uncertainty. If production cuts materialise, it could significantly impact seaborne demand. An exporter informed, “We are refraining from bulk bookings until we see a clearer picture.”
Adding pressure to the market, domestic prices also fell as exporters sought cheaper alternatives to manage costs. Some traders have turned to lower-grade iron ore (Fe 51-52%) for blending to optimise margins amid weak seaborne realisations.
A trader mentioned, “We are blending low-grade fines to stay competitive, as high-grade cargoes (Fe57%) are not fetching a premium in exports anymore. However, some cargos were sold by the Odisha miners at a premium of $1-2/t compared to the bid received by the other exporters.”
Despite the overall softness, some miners’ cargoes still commanded a premium due to better quality, enabling a limited number of export deals.
Looking ahead, the market is expected to remain volatile. The market is waiting for any upcoming news about the Chinese steel production dynamics in the near term.
Chinese spot prices down w-o-w: Benchmark iron ore fines in China decreased by $3/t w-o-w to $97/t CFR on 28 May. The price drop was driven by minor production curbs at select mills, dampening buying interest. The decline was anticipated, as the upcoming monsoon is set to slow down downstream demand and potentially exert more pressure on near-term prices.
DCE iron ore futures down w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2025 contract inched down RMB 20/t ($2.5/t) w-o-w to RMB 707/t ($99/t) on 29 May. Meanwhile, prices rose by RMB 8.5/t ($1/t).
Rationale
- One (1) deal for Fe 57% was noted during this publishing window, but not considered for price calculations. Therefore, T1 trade was given 50% weightage in the index calculation. For the detailed methodology, click here.
- BigMint received twenty-three (23) indicative prices in the current publishing window, and sixteen (16) were considered for price calculation as T2 inputs and given 50% weightage.
Iron ore inventories at major Chinese ports fell by 1.4 mnt w-o-w to 133 mnt on 29 May, according to data published by SteelHome.
Outlook
As per BigMint’s analysis, iron ore export prices will see a fluctuation of $2-3/t in the coming days while demand may remain under pressure.
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