BigMint: India iron ore fines export index falls by $7/t w-o-w

• Weak downstream steel demand in China
  
  
• Index hovering at four-month low
  
  

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $7/t w-o-w at $74/t FOB east coast on 29 February 2024. The index is down to four-months down as the same numbers were last scene towards the end of Oct'23. A deal of 55,000 t iron ore fines (Fe57%) was concluded at $93/t CFR China in the early days of the week but yet to be confirmed the discount given by the seller, hence was not considered in index computation.

In another deal reported, an Odisha based miner sold around 75,000 t cargo of Fe 54.5% grade at the price of $80/t CFR China recently.

The export market for iron ore fines remained downward amid bearish demand and weak offers from seaborne buyers. The overseas buyers looking a higher discount on the index for Indian material therefore sellers are reluctant to sell any material at the prevailing bids. Though they are more watchful and hoping the conditions may get improves in March.

An iron ore miner from the eastern region expressed that "we received a few inquiries for our ready-to-load material at ports but buyers demanded over 20% discount on the index price but expecting the market improvement in the near term, we are holding the offers and not hurry to sell material in the downtrend market flow."

A trader said, "The iron ore market has been very volatile in the last few days. Buyers' bids were observed very low while sellers also held the offers. This resulted in a drop in the spot deals from India in the last few days".

On the other hand, a few Chinese steel sources reported that portside offers in China for Indian iron ore fines (Fe57%) decreased by RMB 25/t ($3/t) w-o-w on 29 February. The offers were recorded at around RMB 745/t ($105/t) at Qingdao Port with inclusive of all import taxes and port charges.

China portside prices fell, and the buying appetite did not significantly increase. Although there were a few trades that had been completed this week. Participants are still not observing a portside demand because Shandong's majority of steel mills still have a surplus inventory.

Sources from China commented that iron ore stockpiles increased at Chinese ports up to a one-year high level and the destocking activity was very slow at the port from mills due to poor downstream steel margin.

Notably, iron ore inventory at major Chinese ports rose by 1.8 mnt to 134.9 mnt on 28 February compared to 21 February, according to SteelHome data. The pellet inventory at the main ports of China was recorded at an eleven-month high level, previously; it was seen in the last week of March 2023.

Other highlights:

• Global iron ore prices drop w-o-w: The benchmark Fe 62% fines index fell by $3/t to $117/t CFR China on 28 February. Prices fell amid thin buying activities and weak downstream steel margins. Inquiries in the seaborne market improved at lower prices. Some reports claimed that smaller-scale mills are buying the material with light volume amid their lower inventory. Major steelmakers were waiting for clearer market sentiments.
  
  
• DCE iron ore futures stable w-o-w: The iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2024 contract remained stable w-o-w at RMB 892/t ($124/t) on 29 February compared to last week. Similarly, on a d-o-d basis, prices remained largely stable.
  
  

India iron ore shipment falls w-o-w: India's iron ore export shipments were recorded at 1,003,015 t in the fourth week of February compared to 972,915 t in the third week of February, as per vessel line-up data maintained with BigMint.

Price indicators:

• One deal was reported this week for fines Fe 57% from the East Coast but not taken into consideration for calculation. Thus, given 0% weightage. For detailed methodology Click here.
  
  
• BigMint received eighteen (18) indicative prices in the current publishing window and nine (9) were considered for price calculation as T2 inputs and given 100% weightage.
  
  

Outlook

The fines export market is expecting volatility in the coming days as some steelmakers in China may start restocking next week. However, BigMint analyzed that deals may increase in the coming days as sources opine that market sentiments may improve in China in the next month.