India: BigMint's iron ore fines export index drops $4/t w-o-w amid weak market sentiments

• Trades absent amid bid-offers disparity
  
  
• Low-grade fines prices up in eastern India
  
  

Iron ore export prices experienced a decline this week, driven by a drop in both the global fines spot and futures indices. A major factor behind this downward pressure is the lack of supportive measures, despite expectations rising post-Chinese government meeting. This has dampened market sentiments, leading to reduced demand for Indian fines. The discount level for Indian fines was recorded at 20-23% on the global fines index.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index dropped by $3.5/tonne (t) w-o-w to $60/t FOB east coast on 17 October 2024, with no deals reported in this period. Exporters have largely adopted a wait-and-see stance, holding back from making deals as they anticipate a possible improvement in seaborne prices.

Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract fell by RMB 31.5/t ($4/t) w-o-w to RMB 746/t ($105/t) on 17 October. On a d-o-d basis, prices sharply dropped by RMB 36.5/t ($5/t) today.

A trader commented that without Chinese government stimulus, sustaining Indian exports will be increasingly difficult, as the seaborne market remains vulnerable at these low price levels. The recent hike in the Odisha Mining Corporation's (OMC's) base price for October auctions has further challenged exporters, raising FOB prices and pushing miners to focus on more profitable domestic sales. Exporters have adopted a wait-and-see approach, as they find it difficult to secure buyers above $75/t CFR China, hoping for an improvement in seaborne prices.

Chinese sources said that Qingdao's portside offers for Indian iron ore fines (Fe 57%) dropped by RMB 45/t ($6/t) w-o-w to RMB 585/t ($82/t) on 17 October, inclusive of import taxes and port charges. Meanwhile, portside fines prices fell by RMB 25/t ($3/t) d-o-d today.

Iron ore inventories at China's major ports increased by 1.35 mnt to 147.15 mnt on 17 October compared to last week, according to SteelHome data.

Price indicators

• No confirmed deal was reported this week, and not taken into price calculation under T1 trade. Thus, this category was given 0% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received fifteen (15) indicative prices in the current publishing window, and fourteen (14) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Chinese iron ore spot prices range-bound: The benchmark iron ore fines index decreased by $1/t w-o-w to $104/t CFR China on 16 October. Prices remained under pressure amid subdued trading as market participants awaited insights from today's press conference by the Ministry of Housing and Urban-Rural Development regarding the property sector.

Outlook

Seaborne iron ore prices may remain volatile in the near term with no clear picture for participants. Sellers' wait-and-watch stance may persist in the absence of price improvement.