India: BigMint's iron ore fines export index rises by $3/t w-o-w on renewed buying intrest

• Moderate trade activity in seaborne market
  
  
• Chinese iron ore port inventory drops w-o-w
  
  
• Exporters eyeing higher prices for new deals
  
  

The Indian iron ore export market witnessed a price surge this week, buoyed by increased interest from seaborne buyers engaging in restocking activities ahead of the Chinese New Year holidays. The positive movement in the global fines spot and futures indices further supported these developments, prompting a few successful deals in the Indian seaborne market.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $3/tonne (t) w-o-w to $64/t FOB east coast, India, on 28 November 2024. Last week, a trader from Odisha concluded a deal for 55,000 t of fines (Fe57%) at $62/t FOB. Another trader also concluded a deal for 55,000 t of fines (Fe57%) at $76/t CFR China in the last couple of days.

However, the market remains cautious and some exporters are eyeing higher price levels in the short term. Market participants are expecting a surge in the global fines index in the next one or two weeks.

In November 2024, the export market mainly remained under pressure with a sharp price drop of $25/t against last year, and profit margins greatly shrunk. Many miners are currently focused on fulfilling previously-booked loadings, with some refraining from offering fresh cargo for export due to the weak market conditions.

A market participant commented: "Despite these challenges, exporters remain optimistic about December, drawing confidence from previous years' trend of steady raw material demand during the Chinese winter period. If the pattern holds this year too, it could stabilise or even push prices upward in the coming month."

However, Chinese mills are adopting a cautious approach, booking materials on need basis. They are increasingly favouring low-priced portside cargoes over seaborne materials, reflecting their cost saving stance in the current market environment.

Chinese spot, futures prices up w-o-w: The benchmark iron ore fines index inched up by $2$/t w-o-w to $104/t CFR China on 27 November. Prices remained supportive following improved market stability and an uptick in primary and secondary market offers. Although seaborne restocking is mostly complete, last-minute purchases may support prices. Additionally, another PBOC meeting is scheduled for December 2024, which may typically boost sentiment. Mills are keeping inventories low, with limited interest in purchasing full-size cargo.

Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract increased by RMB 9/t ($1/t) w-o-w to RMB 786.5/t ($105/t) on 28 November. Similarly, on a d-o-d basis, prices inched down by RMB 5.5/t ($1/t) today.

Meanwhile, iron ore inventories at China's major ports decreased by 2.2 million tonnes (mnt) to 148.5 mnt on 28 November compared to last week, according to SteelHome data.

Price indicators

• One (1) deal was 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 Nineteen (19) indicative prices in the current publishing window, and sixteen (16) were considered for price calculation as T2 inputs and given a 50% weightage.
  
  

Outlook

According to the BigMint analysis, the export market for iron ore seems optimistic in the run-up to the Chinese New Year holidays. Steelmakers may look to book material in the coming days.