- Heavy rains hamper mining operations
- Sellers resist current offers, hold deals
India’s iron ore export market remained largely range-bound this week, with limited activity despite some inquiries surfacing. Market participants indicated that expectations of a possible price gain kept deals on hold, as sellers were reluctant to conclude transactions at current levels.
Prices, deals
BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $65.5/t FOB east coast on 21 August. However, deals remained absent in this week.
Market scenario
“Most exporters are holding back, anticipating a potential upward movement in prices. They are not comfortable selling at the present bid levels, said a market participant. Buyers, on the other hand, have been cautious, with bid-offer disparities preventing firm deals from materialising.
Some demand was reported in the market, with a few deals heard from the east coast. However, these transactions are yet to be confirmed by the parties involved. Exporters highlighted that logistical and supply-side challenges continue to weigh on the overall market sentiment.
“The domestic market is still facing material shortages, and we have yet to restock cargo for shipments. Heavy monsoon disruptions are affecting iron ore production, making it difficult to secure consistent supply,” another exporter commented.
As a result, availability constraints have added pressure to the export market, with many exporters prioritising domestic deliveries where realisations are stronger and demand remains steady. Market participants also noted that, unless supply improves and bid-offer gaps narrow, export activity is likely to remain subdued in the short term.
Overall, while inquiries suggest underlying demand, uncertainties around pricing and material availability have kept India’s iron ore export market relatively quiet this week.
Chinese iron ore market sentiment remained cautious as reduced trading liquidity in mainstream medium-grade fines and expectations of increased mill maintenance in Hebei dampened buying interest. With steel mills likely to lower production amid maintenance schedules, demand outlook softened, prompting participants to adopt a wait-and-see approach. Overall sentiment remained weak as buyers were reluctant to commit amid uncertain near-term steel production levels.
Chinese spot prices fall w-o-w: Benchmark iron ore fines prices in China decreased by $2/t w-o-w to $101/t CFR on 20 August. The declined was due to reduced trading liquidity in mainstream fines, coupled with expectations of mill maintenance and production cuts amid dampened demand. A shift in buying preference toward port stocks and a cautious, wait-and-see stance from traders amid uncertainty in steel output further pressured spot price levels.
Rationale
- No deals for Fe 57% were recorded during this publishing window. Thus, this category was not considered for price calculation. Therefore, T1 trade was given 0% weightage in the index calculation. For the detailed methodology, click here.
- BigMint received nine (9) indicative prices in the current publishing window, and six (6) were considered for price calculation as T2 inputs and given 100% weightage.
Iron ore inventory at Chinese ports were up by 0.05 mnt w-o-w to 131.1 mnt on 21 August, as per SteelHome data.
Outlook
India’s iron ore export market is expected to remain subdued in the near term amid monsoon-led supply disruptions, tight material availability, and wide bid-offer disparities between buyers and sellers. While inquiries indicate underlying demand, exporters are prioritising domestic deliveries with better realisations, and Chinese buying interest remains cautious due to weak steel production outlook.
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