India: BigMint's iron ore fines export index drops $2/t w-o-w; market remains quiet

• Market participants stay on the sidelines
  
  
• Chinese port inventory continues to drop
  
  

Iron ore fines prices in the seaborne market remained under pressure this week due to muted trading activity. Market participants were largely sidelined as there was minimal buying interest from Chinese steel mills which affected overall demand. The disparity between bid and offer prices resulted in a lack of deals, signalling a cautious approach from both buyers and sellers.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index inched down by $1.5/tonne (t) w-o-w to $61/t FOB east coast, India, on 2 January 2025. No iron ore export deals were recorded this week amid subdued market sentiments and cautious trading by participants.

A market participant commented: "With uncertainty in demand, the market is simply not conducive to securing deals at the moment. The price levels are not attractive enough to justify fresh buying, especially with lower inquiries in the market."

According to reports, discounts for Australian fines (Fe56.7%) based on the January average of the global Fe62% index were unchanged at 11%. Meanwhile, blend fines' (58.3%) monthly term contract discounts were also flat at 7.75%. However, the discount level is yet to be confirmed by market participants.

On the domestic front, Indian iron ore prices remained stable this week, with decent demand being seen for the raw material. Despite the larger market stagnation, the domestic sector showed resilience providing some balance to the overall market dynamics.

Chinese spot prices, futures stable w-o-w: China's benchmark iron ore fines index was unchanged w-o-w to $101/t CFR on 31 December.

Iron ore futures on the Dalian Commodity Exchange (DCE) for May 2025 contract inched up by RMB 5.5/t ($1/t) w-o-w to RMB 782/t ($107/t) on 2 January. Furthermore, d-o-d, prices remained largely stable.

Chinese steel mills continued to purchase material from domestic ports. There were limited opportunities for seaborne transactions, with some sellers noting that current prices were also not sustainable due to weak market sentiment.

Iron ore inventories at China's major ports decreased by 2.25 million tonnes (mnt) w-o-w to 144.6 mnt on 2 January, according to SteelHome data. For the second time in the last six and a half months, inventory levels at ports have dropped compared to mid-May 2024.

Price indicators

• No deal was reported in this publishing window and considered for price calculations. Therefore, T1 trade was given 0% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received thirteen (13) indicative prices in the current publishing window, and all were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Outlook

According to BigMint's analysis, prices are likely to remain volatile in the near term due to uncertain demand for seaborne material in China.