India: BigMint's iron ore fines export index inches up, trades subdued

• Buyers offer around 23-25% discount for fines
  
  
• Iron ore futures, spot prices remain supportive
  
  

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $1/t w-o-w to $58/tonne (t) FOB east coast on 20 June 2024. No confirmed deal of Fe 57% fines from India this week was heard. Meanwhile, a prominent exporter from Odisha sold 55,000 t of Fe57% cargo this week but the transaction is yet to be confirmed by the seller.

However, a significant miner from Odisha sold around 55,000 t Fe 54% fines in the export market at 32-33% ($65-66) discount on IODEX Fe62% this week.

Few Chinese steelmakers offered around 23-25% discount for the Indian Fe 57% fines material in the seaborne market. Buyers' bids remained on the lower side compared with exporters' workable prices.

An exporter said: "Prices have inched up compared to last week, but it is still not profitable for Indian sellers due to higher logistics charges from mines to ports. However, we heard that some miners recently sold Fe 57% fines at a decent price, and buyers have shown interest in purchasing lower-grade fines".

As per sources, the Chinese market interest was seen in the medium-grade fines while lower grade was not traded in the higher volumes. The Indian sellers were searching for around $80/t CFR China but buyers' prices were not above $72-72/t CFR China for the Fe57% fines.

Some sources have suggested that a sustained increase in lump premium prices could benefit the Indian market, as Chinese buyers may choose to focus on lower-grade fines to achieve better import margins. Exporters are concerned about the pricing trend in the seaborne market for June, and the prevailing negative sentiment has discouraged them from engaging in transactions.

Price indicators

• No confirmed deals were reported this week and not taken into price calculation under T1 trade and given 0% weightage in the index calculation. For detailed methodology Click here.
  
  
• BigMint received eighteen (18) indicative prices in the current publishing window and seventeen (17) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Portside offers in China of Indian iron ore fines (Fe57%) remained stable w-o-w on 20 June. Offers were recorded at around RMB 615/t ($86/t) at Qingdao Port, including all import taxes and port charges. Meanwhile, prices dropped RMB 10/t ($1/t) d-o-d amid a weak portside market.

Iron ore inventories at China's major ports increased by 0.35 mnt to 146.95 mnt on 20 June compared to the last week, according to SteelHome data.

Other highlights:

• Iron ore spot prices range-bound w-o-w: The benchmark iron ore fines index increased by $2/t w-o-w to $107/t CFR China on 19 June. Prices rose after significant volumes of medium-grade fines were traded, but the focus on downstream margins remained crucial for short-term purchases. Chinese portside prices were stable as spot demand was low. However, reports suggest that steel mills are showing little interest in procuring spot cargoes.
  
  
• DCE futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2024 contract increased by RMB 7.5/t ($1/t) w-o-w to RMB 824.5 ($115/t) on 20 June. However, prices remained unchanged on a d-o-d basis today
  
  
• Shipments up w-o-w: India's iron ore export shipments were recorded at 642,929 t in the second week of June, compared to 342,677 t in the first week of June, as per vessel line-up data maintained with BigMint.
  
  

Outlook

Seaborne export prices may remain impacted on Chinese market sentiments. However, significant hike in prices is unlikely on increased port stocks.