India: BigMint's iron ore fines export index falls nearly $3/t w-o-w on muted trading activity

• Festive holidays keep players away from market
  
  
• Discounts widen w-o-w to 20-21% from 18-20%
  
  

Indian iron ore fines export offers continued to face downward pressure, as buyers avoided procuring lower-grade material at higher prices for a cost-saving approach. The market saw muted trading activity due to a growing bid-offer disparity, with the discount for lower-grade fines widening to 20-21% on the global index (from 18-20% last week) following a lack of inquiries.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $2.5/tonne (t) w-o-w to $62.5/t FOB east coast, India, on 26 December 2024. No iron ore export deals were recorded this week amid subdued market sentiments and cautious trading by participants.

The year-end slowdown significantly impacted transaction volumes, as major market participants withdrew from seaborne trade. Additionally, traders with cargo ready for loading at ports chose to adopt a cautious approach, hoping for better prices in the first week of January, ahead of the Chinese New Year.

A market participant informed, "Few deals from Indian sellers are currently under negotiation. However, their asking prices are higher than buyers' bids. The sellers are aiming for higher prices for cargo deliveries scheduled after the Chinese holiday, but these prices have not been accepted by buyers."

A trader stated, "Market sentiment remains weak due to the holidays and lower demand. Buyers are unwilling to commit at current levels, expecting further corrections."

Chinese spot prices fall, futures stable w-o-w: China's benchmark iron ore fines index fell by $4/t w-o-w to $101/t CFR on 24 December. With the year-end approaching, trading activity in the market slowed, putting downward pressure on seaborne prices throughout the week.

Iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2025 contract remained stable w-o-w at RMB 776.5/t ($107/t) on 26 December. Furthermore, d-o-d, prices remained unchanged today.

According to reports, Chinese mills focused on portside purchases because they are more cost-effective for maintaining margins in steel production. With portside material priced more competitively than seaborne cargoes, Chinese inventory levels dropped slightly this week, reflecting mills' preference for domestic supply.

Iron ore inventories at China's major ports decreased by 0.95 million tonnes (mnt) w-o-w to 146.85 mnt on 26 December, according to SteelHome data.

Price indicators

• No deal was reported in this publishing window and considered for price calculations. Therefore, T1 trade was given 100% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received sixteen (16) indicative prices in the current publishing window, and twelve (12) were considered for price calculation as T2 inputs and given a 50% weightage.
  
  

Outlook

According to BigMint's analysis, iron ore prices are expected to remain volatile in the coming days, as market participants expect an increase in activity in January. However, much will depend on the post-holiday recovery in demand.