India: SteelMint’s low-grade iron ore export index down $4/t w-o-w in recent deals

SteelMint’s weekly index of India’s low-grade iron ore fines (Fe 57%) exports stood at $79/tonne (t) FOB east coast on 2 March, 2023, down $4/t w-o-w. Export prices declined this week due to fall in spot prices w-o-w along with policy changes in China.

SteelMint heard of one deal around 150,000 t of low-grade iron ore fines (Fe 57%) at $92-93/t CFR China. Market participants expected that prices for seaborne iron ore would remain volatile as a result of the Tangshan municipal government’s request to steel mills to lower sintering usage. Some steel mills and traders purchased and restocked from the portside as prices fell.

According to a shipowner source, the freight levels are increasing, and the contango [from the front month] is fairly steep based on the forward freight agreement rate levels, so it has to be taken into consideration. Vessel freight rates from India to China has increased to $13-15/t.

India’s iron ore export shipments were recorded at 888,953 t in the fourth week of February in comparison with 654,380 t in the second week, as per the vessel line-up data maintained with SteelMint.

Price indicators

• One deal was concluded this week so far out of which two were taken for price calculation under T1 trade and given 50% weightage Click here for the methodology.
• SteelMint received twelve (12) indicative prices, bids, and offers in the current publishing window and all were considered for price calculation as T2 inputs and given 50% weightage.

Market highlights

• Global iron ore prices down w-o-w: The benchmark Fe 62% fines index moved up by $3.8/t w-o-w on 1 March 2023 to $126.8/t CFR China as against $130.6/t a week ago. Iron ore spot prices in China fell w-o-w due to lack of market liquidity and reports of capacity reductions in the domestic market.
• DCE iron ore futures rise: DCE iron ore futures’ May 2023 contract slightly increased to RMB 912.5 ($133/t) on 2 March, up RMB 4/t as against RMB 908.5/t ($132/t) on 23 February. DCE iron ore futures contract started with rise of RMB 4/t compared to RMB 908.5/t one day back.
• Port inventories in China rise: Iron ore inventory at major Chinese ports increased by 1.7 mnt to 142.6 mnt on 23 February compared to 140.9 mnt last week, as per SteelHome data.