Chinese Mills Raise Bids for Indian Low Grade Iron Ore Fines

SteelMint in conversation with trade sources that bids for low-grade iron ore fines export from India has increased by USD 2-3/MT against last week. SteelMint's assessment for low grade (Fe 57/58%) iron ore fines prices at USD 62-63/MT, FoB India equivalent to USD 72-73/MT, CFR China. As per the sources, no deal at this rate has been reported yet.

Why have mills raised bids for low-grade iron ore fines?

1. Fall in iron ore inventory at Chinese Ports -: As per the participants, the primary reason for hike in offers is fall in iron ore inventory at Chinese ports. Inventory at major Chinese ports was recorded at 131.7 MnT towards 17th May, and dropped to lowest levels since mid Oct'17, according to data compiled by SteelHome consultancy. Also port stock is expected to drop down further to 120 MnT in June.

2. Spot iron ore fines index continues to increase -: Spot iron ore prices increased amid shortage of global supply Fe 62% fines to USD 108/MT, CFR China on 27th May'19 against USD 100/MT, CFR, China a week before. In a month spot, iron ore prices increased sharply by USD 15/MT, CFR China.

Fortescue Metals Group - world's 4th largest iron ore producer has kept iron ore discount for SSF (super special fines) stable at 11% for the month of June in line with may discount. Discount from the miner has dropped sharply from as high as 42% in Oct-Nov'18 to 33% in Feb'19, 16% in Mar'19,13% in Apr'19 and 11% in May and Jun'19.

Indian iron ore exports expected to cross 1.5 MnT in May'19 -: As per the vessel line up data maintained with SteelMint till 13th May'19, vessels carrying for around 1,551,820 MT iron ore lined for exports. Out of this 1,219,170 MT from Eastern port of India and rest 332,650 MT from other ports.