India: BigMint's iron ore fines export index rises $2/t w-o-w amid Chinese holiday restocking

• Over 350,000 t of deals reported this week
  
  
• Chinese port inventories drop w-o-w
  
  

Iron ore export prices in the Indian market remained steady this week, supported by improved market fundamentals. The rise in buying interest ahead of the Chinese holidays fuelled a series of active deals, narrowing the price disparities between buyers and sellers.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $2/tonne (t) w-o-w to $66/t FOB east coast, India, on 5 December 2024. Two confirmed deals of 125,000 t fines (Fe57%) were recorded from the east coast at $76-77/t CFR China for January delivery. Moreover, three deals of over 150,000 t were concluded in the last couple of days at $77-79/t CFR China, but are yet to be confirmed.

A miner from Odisha concluded around 60,000 t of Fe54-55% fines at $54/t FOB east coast recently. As per sources, the discount level narrowed for Indian fines in recent deals for Fe57%. Miners' deals were concluded at an 18% discount on the global fines index while traders' cargoes received 18-20% for their transactions.

Chinese steel mills are favouring Indian cargo for its cost-effectiveness and blending benefits, helping them manage import margins amidst a downturn in the steel market. While some mills are restocking as needed, others are sourcing more Indian material to sustain operations. Moreover, iron ore inventory has significantly decreased in the past two weeks.

An exporter from Odisha informed, "With several deals under negotiations, we expect prices to stay firm in the coming days. The narrowing gap between buyers and sellers is promoting trade volumes, and we anticipate this trend will persist in the near future."

Chinese spot, futures prices up w-o-w: The benchmark iron ore fines index inched up by $2/t w-o-w to $106/t CFR China on 4 December as Chinese steel mills implemented measured restocking strategies ahead of the Lunar New Year. Procurement decisions were driven by a focus on cost optimization amid declining finished steel margins, as well as ample port inventory levels, leading to restrained purchases of medium-grade fines.

Iron ore futures on the Dalian Commodity Exchange (DCE) for January 2025 contract increased by RMB 14/t ($2/t) w-o-w to RMB 800.5/t ($110/t) on 5 December. However, d-o-d, prices inched down by RMB 11.5/t ($1.5/t) today.

Meanwhile, iron ore inventories at China's major ports decreased by 2.4 million tonnes (mnt) to 146.1 mnt on 28 November compared to last week, according to SteelHome data.

Price indicators

• Two (2) deals were reported for this index and considered for price calculation. Therefore, T1 trade was given 50% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received Fifteen (15) 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 the BigMint analysis, iron ore prices in the seaborne are expected to remain supportive in the coming days as Chinese mills continue to restock ahead of the Lunar holidays. Trading activity is likely to stay strong in the near term, as there is still demand for January delivery cargo in the market.