SteelMint’s weekly low-grade Indian iron ore fines (Fe 57%) export index has moved down by $14/t to $88/t FoB east coast India. Demand for low grade ore turned further weak on stricter pollution control norms in China.
China’s top steelmaking city, Tangshan has imposed mild-to-medium air pollution curbs from 18 May to 22 May’21.Sintering machines, rotary kilns of cement plants and foundry (except for EAF), brick/tile furnaces have been ordered to suspend operations from midnight to 10 a.m. in the morning.
Dalian iron ore futures fell by 4% d-o-d for Sep contract closed at RMB 1,142.5/t (- RMB 50) d-o-d). On weekly basis, futures have fallen by around RMB 74/t against RMB 1,216.5/t.
Following the slump in futures, Chinese spot iron ore fines Fe 62% index moved down by $8/t to $215.45$/t CFR China yesterday. There are very limited offers in the market as Chinese futures of steel and iron ore dropped sharply from the last few days back.
“35-36% discounts are being discussed. However few bids are even at $110/t CFR China, but Indian miners & exporters are targeting $115-118/t CFR China levels”, shared a trader with SteelMint.
Rationale:
- Price indicators- One confirmed deal was reported this week for 55,000 t of Fe 57 fines at $115/t CFR China at the beginning of this week. It has been considered for price calculation and kept the weightage 50% under T1 trade.
- SteelMint has received ten (10) indicative prices and offers during the publishing window, and nine (9) were considered for price calculation as T2 inputs and given a weightage of 50%.
Market highlights:
Freight rates increase further – Freight rates for 50,000-55,000t export vessels from east coast India (Paradip) to China increased by around $1-2/t w-o-w to $ 24-25/t.
Iron ore stocks at Chinese ports increases – Iron ore inventory at major Chinese ports increased by around 0.32 mn t to 128.35 mn t this week as compared with 128.03 mn t, a week before as per the data maintained by SteelHome.
Domestic iron ore prices stable- Odisha based miners have kept the offers stable for Fe 57%. Price indications for Fe 57% fines are at INR 4,200-4,400/t ex-mines, including Royalty, DMF & NMET.
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