Nowadays Indian iron ore exporters exploring opportunities to sell Indian iron ore at “Cash and Carry” basis at Chinese Port. Currently, Indian cargoes are trading at a discount of around 11% against Platts index.
Apparently, not many iron ore exporters are active in Indian market due to the recent decline in global iron ore prices by around USD 11/MT, CFR China starting May’16.
Since, global iron ore prices have dropped down by around USD 11/MT, starting May’16, Indian iron ore exporters are hesitant to conclude any deal. Current prices for Fe 62% fines are assessed at USD 54/MT, CFR China on 12 May’16.
As per index, current offers for Fe 57% Indian iron ore fines would come around at USD 39-41/MT, FOB India and USD 45-46/MT CFR China including all the cost i.e.hedging, freight, logistics etc. However, there is no impact in reduction in freight on iron ore exports, as global prices continue to drop. The expected buying by Indian exporters for Fe 57/58% fines would come around at INR 1,700-1,800/MT, FOR, West Coast.
According to market sources, “Chinese steelmakers are not interested in Indian cargoes because of uncertain supplies and inconsistent quality. Chinese buyers are keen to buy small quantities of 10,000-15,000 MT rather than a full shipload. Also, sellers may get a USD 1 if they sell on stock sale basis”.
Due to rapid fall in global iron ore prices, Indian exporters who have bought the material at higher prices, are not getting an appropriate price to sell their material. According to one market participant,” They have bought around 100,000 MT iron ore from open market last month but now as prices have come down significantly, material is stocked”.
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