India: BigMint's iron ore fines export index remains stable in recent deal

• Discounts for Fe 57% fines stable at 23-25%
  
  
• Over 100,000 t of export deals heard from India
  
  
• Iron ore inventories in China increase to 148 mnt
  
  

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $58/tonne (t) FOB east coast on 27 June 2024. An exporter from Odisha sold 55,000 t of Fe57% fines cargo last week at $72/t CFR China in this publishing window. In another deal, a miner from Odisha sold around 55,000 t of Fe54% fines in the export market at 32-33% ($62-63/t) discount to the benchmark price seen on the Fe62% index this week. However, the deal has not been confirmed by the buyer or seller at the time of publishing this article.

Prices of Indian low-grade fines remained range-bound in the seaborne market. Buyers showed interest in the Indian material at lower prices. Though several deals were under negotiation, none were concluded due to sellers' higher asking prices.

An exporter said: "The buyers were ready to purchase material at the $72-73/t CFR range and it depended on whether the sellers wanted to sell or hold their material. The miners have kept their offers on hold as they were expecting some improvement in the coming days. The discount range remained stable at around 23-25% on the benchmark Fe62% index."

Chinese mills mostly adopted a wait-and-see approach, with some purchases being made based on production needs. Portside stocks of both types of ore saw a slight decrease, but the prices of Australian low-grade fines appeared to be more vulnerable due to higher arrivals than Indian fines. Some market participants are also considering booking more pellets and concentrates due to cost advantages. In the short term, mills' profits remained low, but there may be an increase in demand for low-grade material such as special and Indian fines.

Price indicators

• One (1) confirmed deal was reported 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 thirteen (13) indicative prices in the current publishing window and nine (9) were considered for price calculation as T2 inputs and given a 50% weightage.
  
  

Iron ore inventories in China's major ports increased by 1.05 mnt to 148 mnt on 27 June compared to the last week, according to SteelHome data.

Factors driving sea-borne market

• Iron ore spot prices stable w-o-w: The benchmark iron ore fines index remained stable w-o-w at $107/t CFR China on 26 June. However, trading liquidity decreased for the week, with limited procurement activity from end-users and trading houses. The market players are in a wait-and-watch mode, showing hesitancy towards immediate procurement, leading to subdued demand in recent days. However, mills are opting for cheaper fines to improve production margins.
  
  
• China portside offers stable w-o-w: Portside offers in China of Indian iron ore fines (Fe57%) remained largely stable w-o-w on 27 June. Offers were recorded at around RMB 610/t ($85/t) at Qingdao Port, including all import taxes and port charges. Meanwhile, prices dropped by RMB 5/t ($1/t) d-o-d.
  
  
• DCE futures largely stable w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2024 contract inched down by RMB 5.5/t ($1/t) w-o-w to RMB 819 ($114/t) on 27 June. However, prices fell by RMB 7/t ($1/t) on a d-o-d basis today.
  
  

Outlook

Seaborne export prices are expected to remain volatile following some policy announcements made by the Chinese government recently. It is expected that some positive changes in China may support Indian iron ore export prices in the coming days.