SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index fell sharply by around $9/t this week and is currently assessed at $85/t FoB east coast India. No deal was concluded so far this week. Approaching Chinese holidays have lowered buying inquiries with most of the steel makers/traders turning reluctant to conclude deals.
However, Indian miners and exporters are quite confident for rebound in prices post-holidays backed by improved demand.
Global iron ore prices have remained very volatile this week. Towards the beginning of this week, prices fell to two-months low. However, spot iron ore fines (Fe 62%) index increased up $6/t today against yesterday close after Vale announced its yearly production results. Miner has produced 300.4 mn t iron ore in CY’20 and fell short of annual target which was 300-305 mn t for 2020. The S11D ramp up, resumption at Vargem Grande was offset by constraints in tailings disposal in Itabira and Brucutu, COVID impacts and four months stoppage at Fazendao site.
Price indicators- No confirmed trade has been reported this week so far therefore T1 trade was not taken into consideration and given weightage 0%.
- Freights from east coast of India to China for Supramax vessels have at $14-15 this week against last week around $15-16.
- SteelMint has received eight (11) indicative prices and offers during the publishing window, and ten (10) were considered for price calculation as T2 inputs, with an average price of $85/t FoB India.
Rationale: The index has been calculated using an average of T1 and T2 price inputs. Transactions confirmed by either a buyer/seller are designated as T1 input while bids, offers, and indicative prices are designated as T2 inputs. Both T1 and T2 categories of inputs carry 50% weightage each in price calculation for FOB price assessment.
Market highlights –
- Spot iron ore fines price rebounds after hitting 2-months low – Chinese spot iron ore fines (Fe 62%) index has rebounded to $158.05/t CFR China today after hitting 2-months low on 01 Feb’21.
- Iron ore futures rose slightly- Dalian iron ore futures’ contract of May’21 closed today at RMB 991/t against RMB 985.5/t last week.
- Iron ore stocks at Chinese ports remain stable- Iron ore inventory at major Chinese ports has remained stable this week at 126.15 mn t as per data maintained by SteelHome.
- SteelMint’s assessment for Indian low-grade iron ore fines (Fe 57%) also remained unchanged this week at INR 3,800-4,000/t (ex-mines, incl. Royalty, DMF and NMET).
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