India: BigMint's iron ore fines export index falls $6/t w-o-w amid weak market sentiments

• Global iron ore fines prices, futures fall w-o-w
  
  
• Indian exporters adopt wait-and-watch stance
  
  

This week, iron ore prices in the seaborne market experienced a decline as global fines prices continued to drop, impacting market sentiment and trading activities. Market participants remained cautious, with some anticipating adjustments in pricing from China. In response to increasing pressure, Chinese mills are now looking for more affordable iron ore sources from other regions.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $6/tonne (t) w-o-w to $59/t FOB east coast, India, on 14 November 2024. Last week, a miner from Odisha had concluded a deal for 50,000 t of fines (Fe57%) at $66/t FOB Paradip, while a trader sold around 55,000 t of fines (Fe57%) at $64/t FOB east coast.

A prominent miner from Odisha sold over 300,000 t of fines (Fe57%) in November but deals are yet to be confirmed by the parties concerned.

"Miners who initially aimed for a price of $70/t FOB have now lowered their expectations to $65/t due to weak market sentiment. Price volatility has limited transactions, prompting traders and miners to adjust their expectations." said a seller.

The lack of inquiries in the market from buyers has lowered market confidence, leaving Indian exporters with no choice but to wait for a price recovery in the sea market for their future trades.

"We are closely monitoring the Chinese market response, as inventory levels are high. Higher port inventories and decreased demand from Chinese mills have further constrained the market, leaving sellers uncertain about future price recovery." an exporter commented.

Notably, the state miner OMC is set to conduct an iron ore auction on 20 November. This auction will provide exporters with better clarity regarding their trade prices, especially as current prices for lower-grade fines are not beneficial for them.

Chinese spot, futures prices fall w-o-w: The benchmark iron ore fines index decreased by $4/t w-o-w to $105/t CFR China on 13 November. Prices fell owing to cautious procurement by steel mills and ample port stock availability, which stabilised supply-demand dynamics. Additionally, the increasing cost-effectiveness of spot cargos over seaborne alternatives has encouraged steel mills to focus on existing portside stocks rather than new shipments, limiting price fluctuations.

Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract decreased by RMB 43.5/t ($6/t) w-o-w to RMB 756/t ($104/t) on 14 November. Similarly, On a d-o-d basis, prices dropped by RMB 6.5/t ($1/t) today.

Meanwhile, iron ore inventories at China's major ports decreased by 1.6 million tonnes (mnt) to 148.3 mnt on 14 November compared to last week, according to SteelHome data.

Price indicators

• No deals were reported for this index price calculation as deals were considered in a previous assessment. Therefore, T1 trade was given 0% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received nineteen (19) indicative prices in the current publishing window, and fifteen (15) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Outlook

In the coming days, iron ore export prices are expected to remain volatile due to fluctuations in prices of seaborne cargoes and cautious procurement by Chinese mills. Some mills have purchased the material from portside locations to secure better margins.