Global iron ore index drops $40 m-o-m; will imports to India increase?

Global iron ore prices have witnessed a considerable decline in the past one month on the back of weaker steel demand outlook and production curbs in China. The benchmark Fe62% Australian fines price, after touching dizzying heights of more than $230/tonne (t) around the third week of May'21 has come down to the current levels of $92/t, CFR China. Prices are down $40/t m-o-m*.

Following the steep decline in global prices, inquiries for imported fines have picked up in India in addition to South African lumps which are being booked by coast-based players. SteelMint in conversation with a few mills learned that talks for fines import bookings are underway for end-Dec or early Jan'21 arrivals. Price indications for Fe62% fines are heard at around INR 7,300-7,500/t landed at Indian ports. On the other hand, SteelMint's weekly Odisha iron ore fines (Fe 62%) index decreased to INR 6,000/t (ex-mines, including royalty, DMF and NMET).

Similarly, the current assessment for imported lumps (Fe 65%) stands at $110/t CNF Kandla. Lump enquiries have picked up recently amid falling global prices. South India-and Gujarat-based steel mills have been actively booking vessels.

Recent Iron ore import vessels lined up:


Source: SteelMint
Provisional data

The falling global iron ore prices have led to improved inquiries for imported ore, which are expected to boost import volumes. These deals have surfaced after a gap of around nine* months with the last import parcels seen in Jan'21, at 0.14 million tonnes (mn t) and at 64,000 tonnes in Dec'20.

*correction