India: BigMint's iron ore fines export index inches down, market fundamentals weak

• Deals remain subdued in sea market
  
  
• Chinese ports inventories rise w-o-w
  
  

The seaborne iron ore export market witnessed a quiet week with no significant trades recorded in the seaborne space. Market participants attributed the inactivity to unattractive price levels, which kept major exporters on the sidelines, dampening overall sentiments.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index stood at $60/t FOB east coast, India, on 9 January 2025. The index fell marginally by $1 w-o-w. No iron ore export deals were recorded this week amid subdued market sentiments and cautious trading by participants.

An exporter said: "The lack of export demand and a recent drop in domestic prices have made market participants cautious. Uncertainty on price stability, and discounts on Indian fines hovering at a significant 18-20%, make it challenging to compete globally."

However, one Odisha-based miner was heard to have concluded an export deal at about 17-18% discount recently.

Some exporters are targeting higher prices in their transactions but thanks to the current sentiments and prices quoted by buyers, they are unlikely to achieve these in the near term.

Another market participant informed, "Chinese mills have shifted their focus to lower-grade iron ore cargoes. However, their interest in Indian low-grade fines remained muted. The demand for Indian low-grade fines has been lacklustre, and mills are currently prioritising domestic procurement over imports due to price considerations."

Chinese spot prices, futures drop w-o-w: The benchmark iron ore fines index dropped by $3/t w-o-w to $97/t CFR China on 8 January. Trading activity slowed amid weak fundamentals ahead of the Lunar New Year holidays, and seaborne demand is not expected to improve. Consequently, low-grade and discounted products will likely remain the most cost-effective options for end-users.

Iron ore futures on the Dalian Commodity Exchange (DCE) for May 2025 contract fell by RMB 28/t ($4/t) w-o-w to RMB 754.5/t ($103/t) on 9 January. Furthermore, d-o-d, prices inched up by RMB 7/t ($1/t).

A trader noted, "Market conditions are stagnant, and we don't foresee any major activity until there's a shift in demand fundamentals or pricing improves."

Iron ore inventories at China's major ports increased by 2 mnt w-o-w to 146.6 mnt on 9 January, according to SteelHome data.

Price indicators

• No deal was reported in this publishing window and considered for price calculations. Therefore, T1 trade was given 0% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received thirteen (13) indicative prices in the current publishing window, and all were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Outlook

According to BigMint's analysis, with poor demand weighing on sentiment and discounts persisting, the outlook for Indian iron ore exports remains subdued in the near term.