- Discount narrows for low-grade fines in seaborne market
- Active deals reported with recent improvement in inquiries
The Indian iron ore export market has witnessed an uptick in the last couple of days, buoyed by positive macroeconomic developments in China. Export prices rose by $3-4/t on significantly improving sentiment in the Indian seaborne market. This price rise also led to a narrowing of discounts on low-grade iron ore fines, with Fe 57% fines assessed at a reduced discount of 16-18%, while Fe 54-55% fines saw discounts tighten to 22-24%.
A major Australian iron ore miner released the discounts for July term contracts on its special lower-grade fines. The discount narrowed to 11% from June’s 11.75%, which has kept discounts on Indian iron ore fines at the higher end.
Prices, deals
BigMint’s bi-weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $3/t w-o-w to $62.5/tonne (t) FOB east coast on 3 July. Around 230,000 t Fe57% fines were sold at $72-73/t CFR China during the review period. A few cargoes of Fe54-55% also attracted buyers’ attention.
Market scenario
Market participants confirmed that several ready-to-load cargo deals were recently booked, and a few additional negotiations are currently underway. An exporter commented: “Export inquiries have picked up significantly in the last 2-3 days with the hike in prices. The recent price movement has brought viability back to the table for many exporters.”
Iron ore exporters believe that if the current price levels are sustained, more deals could be concluded in the coming days. Another exporter said, “Buyers are showing renewed interest, and we have managed to close some deals at workable levels. However, the sustainability of this uptrend will be crucial.”
However, some Chinese regions are reportedly considering steel production cuts, which could dampen iron ore demand and potentially reverse the current rally. A market participant added, “While the outlook has turned optimistic, volatility remains a key concern. Any decision on steel output cuts in China will directly impact price direction.”
Chinese spot prices up w-o-w: Benchmark iron ore fines in China rose by $2/t w-o-w at $95/t CFR on 3 July. The hike was driven by positive macroeconomic signals, improved futures sentiment, and supportive policy news. The continued better margins of steel mills and regional sintering cuts may enhance lump demand, providing price support. Meanwhile, market sentiments improved following higher finished steel sales.
DCE iron ore futures climb w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2025 contract increased by RMB 27.5/t ($4/t) w-o-w to RMB 733.5/t ($102/t) on 3 July. Meanwhile, prices saw an increase of RMB 11/t ($1.5/t) on a d-o-d basis.
Rationale
- Three (3) deals for Fe 57% were recorded during this publishing window and taken for price calculation. Thus, this category was not considered for price calculation. Therefore, T1 trade was given 50% weightage in the index calculation. For the detailed methodology, click here.
- BigMint received eleven (11) indicative prices in the current publishing window, and nine (9) were considered for price calculation as T2 inputs and given 50% weightage.
Iron ore inventory at Chinese ports remained stable w-o-w at 133.6 mnt on 3 July, as per data published by SteelHome.
Outlook
As per BigMint’s analysis, in the short term, the iron ore export market is expected to remain volatile, with participants closely watching Chinese policy signals and pricing trends for further clarity.
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