SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index moved down by $2/t to $90/t FOB east coast India. Demand for low grade ore remained weak on stricter pollution control norms in China favouring demand for high grade ore.
“The discounts for Indian low-grade ore are still at around 34-35% and are expected to be increase in the upcoming days as the demand for low-grade ore is getting weaker”, a trader highlighted while talking to SteelMint.
A major Australian miner has also significantly increased the discount on low-grade ore for May’21 shipments. SteelMint has learned from market participants that the miner has increased the discount of SSF low-grade fines (Fe 56.7%) from 10.5% in Apr’21 to 18% for May’21 deliveries.
As the Chinese authorities are more vigilant on another round of plant inspection of emission outside northern China to maintain the production cut target for the year. Therefore, steel mills may lower the demand for low-grade ore in the near short term.
Spot iron ore price hits a new high – Spot iron ore fines index have rallied and hit a new high just after Chinese markets resumed trades after a labour holiday between 1-5 May. Spot prices for Fe 62% fines opened with $12/t w-o-w hike and closed at $202.65/t , CNF China today on 6th May against $190.45/t CFR China a week back.
Rationale:
- Price indicators- No confirmed deal was reported this week. Hence not considered for price calculation and kept the weightage 0% under T1 trade.
- SteelMint has received eight (8) indicative prices and offers during the publishing window, and seven (7) were considered for price calculation as T2 inputs and given a weightage of 100%.
Market highlights:
Spike in freight rates – Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China increased by around $4-5/t to $ 21-22/t against last week.
Iron ore stocks at Chinese ports fall further- Iron ore inventory at major Chinese ports declined by around 2 mn t to 131.05 mn t this week as compared with 133.1 mn t, a week before as per the data maintained by SteelHome.
Iron ore futures increase sharply- Dalian iron ore futures contract of Sep’21 closed today at RMB 1,184/t against RMB 1,126.5/t a week before. Iron ore futures surged on the back of hike in steel futures and optimistic iron ore demand outlook.
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