India: BigMint's iron ore fines export index inches up w-o-w in recent deals

• Around 330,000 t of export deals seen from Indian sellers
  
  
• Australian miner rolls over lower grade discount for Aug
  
  

The Indian fines export market remained supported this week by some successful transactions for lower-grade fines in the seaborne market. However, sources said, miners received decent bids but traders struggled to sell their material in the overseas market. Around 300,000 tonnes (t) of export material were transacted in the seaborne market in the last one week.

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $1.5/t w-o-w to $58/t FOB east coast on 1 August 2024. A few active deals of iron ore fines export were witnessed in the last one week which added up to around 330,000 t. A deal of 55,000 t (Fe 57%) fines was concluded at $70/t CFR China recently. A South India-based exporter sold 2 cargos (110,000 t, Fe57%) at $73/t CFR China a few days ago. Another miner from Odisha sold some cargos at a 20% discount on the global index. However, the transactions are yet to be confirmed from the miner.

Sources said that fines performed comparatively better in the export market against pellets in the last few days. The discount for the single mine material has been narrowed which supported the miners' deals while other exporters kept a cautious stance to sell their material and waited for an improvement in global markets.

According to market participants, a top Australian miner maintained a 15% discount for special fines (Fe56.5%) based on the August average of the global index, while Fe58.5 fines were dropped to 9.75% in August against a 10.25% discount based on the July average of the global index.

An iron ore exporter said: "The current prices are not viable for sale as global fines prices have fluctuated too much in the last few days. The exporters are waiting for price improvement and expecting a hike in global fines prices in the next few weeks. The miners are selling at over $70/t CFR China level."

According to reports, high-grade fines are still too expensive for most steel mills, which are operating at a loss, making it difficult to purchase them in large amounts to continue blending with low-grade fines. This has contributed to supporting demand for Indian lower-grade fines in the sea market.

Some sources mentioned that the prices of lower-grade fines are expected to increase in the near term due to the rise in iron ore demand in the Chinese market, but they were uncertain about active transactions for traders.

Price indicators

• One confirmed deal was reported from the east coast this week and taken into price calculation under T1 trade and given 50% weightage in the index calculation. For detailed methodology Click here.
  
  
• BigMint received sixteen (16) indicative prices in the current publishing window and twelve (12) were considered for price calculation as T2 inputs and given 100% weightage.
  
  

Iron ore inventories in China's major ports remained stable at 151.7 million tonnes (mnt) on 1 August compared to the last week, according to SteelHome data.

Factors impacting seaborne market

• Iron ore spot prices stable w-o-w: The benchmark iron ore fines index remained stable w-o-w at $101/t CFR China on 31 July. Fluctuations were witnessed in prices throughout last week. More mills are expected to implement production cuts after completing their maintenance. Reduction in production from steel mills has affected purchasing in the spot market.
  
  
• Portside offers in China up w-o-w: Portside offers in China of Indian iron ore fines (Fe57%) rose by RMB 15/t ($2/t) w-o-w on 1 August. Offers were recorded at around RMB 590/t ($84/t) at Qingdao Port, including all import taxes and port charges. D-o-d, portside prices increased by RMB 20/t ($3/t) today.
  
  
• DCE futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2024 contract decreased by RMB 15.5/t ($6/t) w-o-w to RMB 749($106/t) on 1 August. Meanwhile, futures dropped by RMB 18/t ($3/t) d-o-d against RMB 764/t ($108/t) yesterday.
  
  

Outlook

Seaborne iron ore export prices are expected to remain range-bound following production cuts by Chinese mills and higher port inventory levels.