India: BigMint's iron ore fines export index holds firm amid active trades

• Chinese spot, futures prices increase w-o-w
  
  
• Few seaborne fines trade seen from India
  
  
• Discount for Fe 57% cargoes at 19-21%
  
  

The seaborne iron ore fines market saw a positive trend this week, fuelled by supportive market sentiment and rising spot and futures indices. Sellers from India's east coast successfully secured few deals, with some being able to fetch decent prices for their shipments amid the market's fluctuations. Discount for the Fe57% fines cargo was noted at a 19-21% level on the global fines index.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $1/tonne (t) w-o-w to $65/t FOB east coast, India, on 7 November 2024. Reportedly, an Odisha-based trader sold a 55,000-t cargo of iron fines (Fe 57%) at $76/t CFR China at the beginning of the week. Additionally, another Indian trader sold a cargo of 55,000 iron fines (Fe 56-57%) at around same price this week.

A leading Australian iron ore miner dropped the discount to 11% (11.5% in October) for special fines (Fe56.5%) based on the November average of the global index, while those for the Fe58.5% fines remained stable at an 8% discount based on the November average of the global index.

Several sellers are adopting a "hold-and-wait" strategy, targeting the $70/t FOB price, indicating confidence in a potential price uplift. However, other market players noted that, with prices expected to remain largely rangebound, some sellers might have to settle for viable price points to stay competitive.

A market source commented, "Buying interest in the seaborne market remained strong post-Diwali, with several deals completed and a narrowed price gap between buyers and sellers. However, Chinese port inventories are nearing 150 million tonnes, which could dampen demand. Following the USA election results, the market saw an uptick in seaborne trades today."

Chinese mills are now purchasing iron ore as needed, waiting for favourable policy announcements from the Congress meeting on 4-8 November. If the government announces support for the steel sector, it could boost demand and revive buying interest from the mills.

Chinese spot, futures prices up w-o-w: The benchmark iron ore fines index increased by $3/t w-o-w to $105/t CFR China on 6 November optimistic market sentiment driven by expectations of potential macroeconomic stimulus announcements from the ongoing Chinese National People's Congress meeting. This anticipated policy support has spurred increased trading activity and buying interest, particularly for medium-grade fines, reflecting a positive outlook on economic measures that could bolster demand.

Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract increased by RMB 18/t ($2.5/t) w-o-w to RMB 799.5/t ($112/t) on 7 November. Similarly, On a d-o-d basis, prices rose by RMB 18/t ($2.5/t) today.

Meanwhile, iron ore inventories at China's major ports increased by 0.75 million tonnes (mnt) to 149.9 mnt on 7 November compared to last week, according to SteelHome data.

Price indicators

• Two (2) deals were reported this week but were not considered, as one was in a previous assessment and the other does not pertain to India's east coast. Therefore, T1 trade was given 0% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received seventeen (17) 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 rangebound with the expectation of some deals as Indian exporters may sell their cargoes. However, the demand from Chinese mills is expected to be revised after the Chinese Congress meeting.