SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index is currently assessed at $92/t FoB east coast India, down by $3 w-o-w. Export price has fallen on the back of sharp hike in vessel freight rates, sources have reported to SteelMint. Vessel freight rate from east coast of India to China for a Supramax vessel has increased to $20/t today which was $14 a week back. Traders highlighted less availability of empty vessels has resulted in freight rate hike.
However, imported iron ore prices in China for Indian origin fines have increased by around $3/t w-o-w to $112/t CFR China. Spot iron ore price in China increased sharply today just after a week-long CNY holiday. In addition to it, iron & steel futures have also posted sharp gains today.
“The market is yet to get a clearer picture as today is just the first day after CNY holidays. Sentiments are bullish but price clarity is still awaited”, shared a trader.
Price indicators- One confirmed trade was reported so far in this week at $90/t FoB India for around 30,000 t Fe 57% fines. However, this deal was not considered for price calculation under T1 trade as it has been concluded from an eastern India based port and therefore was given weightage 0%.
SteelMint has received ten (10) indicative prices and offers during the publishing window, and nine (9) were considered for price calculation as T2 inputs, with an average price of $92/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 increases by $5.5/t – Chinese spot iron ore fines (Fe 62%) index has increased today to $174.4/t CFR China against China closed last week before holidays on 10th Feb at $165.95/t CFR China last week.
- Iron ore futures open with a sharp hike- Dalian iron ore futures’ contract of May’21 opened today with a hike of RMB 60/t to RMB 1,131.5/t against RMB 1,071.5/t before holidays.
- Iron ore stocks at Chinese ports increases by ~3 mn t- Iron ore inventory at major Chinese ports has increased by 2.75 mn t this week to 128.65 mn t as per data maintained by SteelHome.
- Domestic offers of low-grade iron ore fall – SteelMint’s assessment for Indian low-grade iron ore fines (Fe 57%) has come down on improving supplies in Odisha. Prices have fallen by around INR 400-500/t this week to INR 3,400-3,500/t ($ 47-49/t, ex-mines, incl. Royalty, DMF and NMET).
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