India: BigMint's iron ore export index falls by $5 w-o-w ahead of Lunar holidays

• Drop in global fines, future prices
  
  
• Sellers in wait-and-watch mode
  
  
• Few sellers loading cargo for February delivery
  
  

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $5/tonne (t) w-o-w to $86/t FOB east coast on 1 February 2024. A deal of 55,000 t Fe 57% fines was heard at $88/t FOB India last weekend, however, it is yet to be confirmed by the seller.

The seaborne market Indian low-grade fines remained sluggish this week amid lack of interest from buyers in the absence of aggressive bookings. The drop in futures and global iron ore prices also discouraged market confidence. As per sources, most of the Chinese mills almost completed restocking for iron ore ahead of the Lunar holidays, so buyers remained cautious about booking material at higher offers amid low steel margins and production.

A miner from the east Indian region said: "the majority of participants in the seaborne market were absent due to the Lunar New Year celebration, therefore it is expected that trade would decrease over the next several days".

According to a seller: "During Lunar New Year holidays, iron ore prices fall owing to lack of demand, but post-holidays, there is expected to be a restocking demand."

On the other hand, a few Chinese steel sources reported that portside offers in China for Indian iron ore fines (Fe57%) had decreased by around RMB 40/t ($6/t). Today's offers were recorded at around RMB 830/t at ($117/t) Qingdao port inclusive of all import taxes and port charges.

The inventory level at Chinese ports increased and steelmakers hesitated to book iron ore while restocking volume also completed earlier which weighed on portside prices. Due to declining profits during the sluggish season for steel consumption, several Chinese steelmakers would rather do maintenance in advance during Lunar New Year vacations.

The National Bureau of Statistics of China reported that for the fourth consecutive month in January, the manufacturing Purchasing Manager's Index (PMI) was in the restrictive zone, suggesting a decline in the demand for iron and steel downstream. Several steel mills are currently undergoing maintenance shutdown amid the off-season.

Price indicators:

• No deal was reported this week for fines Fe 57% from the east coast and taken into calculation. Thus, given 50% weightage. For detailed methodology Click here.
  
  
• SteelMint received eighteen (18) indicative prices in the current publishing window and thirteen (13) were considered for price calculation as T2 inputs and given 100% weightage.
  
  

Market highlights:

• W-o-w fall in global iron ore prices: The benchmark Fe 62% fines index decreased by around $4/t w-o-w to $132/t CFR China on 31 January. Prices fell on weak finished steel demand and the completed replenishment of iron ore procurement by the major mills in China, signaling a decrease in demand. However, some reports suggested last-minute restocking in a few more days with the lower volume.
  
  
• DCE iron ore futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) contract for May 2024 decreased by RMB 19/t ($3/t) to RMB 968/t ($136/t) on 1 February compared to last week. On a d-o-d basis, prices rose by RMB 7.5 ($1/t) as against RMB 960.5/t ($135/t).

  
  
  

• Iron ore port inventory in China increases w-o-w: Iron ore inventory at major Chinese ports rose by 1.8 mnt to 124 mnt on 25 January compared to the previous week, according to SteelHome data.
  
  

India's iron ore export shipments were recorded at 1,132,549 t in the last week of January compared to 954,048 t in the third week of January, as per vessel line-up data maintained with SteelMint.

Outlook

The fines export market is expected to remain volatile in the coming days following the Lunar holidays in China. However, few deals can be expected in the sluggish market.