India: BigMint's iron ore fines export index rise by $2/t w-o-w in recent seaborne transactions

• Global fines spot & futures prices increase w-o-w
  
  
• Chinese portside stocks at over 150 mnt this week
  
  

Indian iron ore export prices increased by $2-3/t this week. This rise can be attributed to positive market trends and some deals that got concluded this week so far. The spot and futures prices of iron ore fines also helped improve the market sentiments. However, exporters are being cautious and aiming for a target price of $65/t FOB India to keep good profit margins despite changing conditions.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $2/tonne (t) w-o-w to $61/t FOB east coast, India, on 21 November 2024. Last week, a trader from Odisha concluded a deal for 55,000 t of fines (Fe57%) at $74/t CFR China. While another trader also concluded 55,000 t of fines (Fe57%) at $74-75/t CFR China at the beginning of this week.

A miner informed, "The domestic market is experiencing a shortage of lower-grade fines, leading miners to focus on local sales. Domestic buyers are offering better prices and we have pending raw material deliveries, making exports less attractive for the time being."

At the recent Odisha Mining Corporation (OMC) auction, bids for iron ore fines dropped by INR 300/t ($4/t) m-o-m yesterday. This reduction is expected to lower transaction costs, potentially encouraging traders to finalise export deals in the coming days.

A market participant commenting on the current market dynamics, said: "The market requires more stability. Indian exporters are hesitant to finalise deals without improved margins. Sellers are looking at discounts of 18-19% on the global fines index, while seaborne buyers are seeking fines cargo of Fe57% grade at discount levels of 20-21%. This discrepancy has hindered the completion of some deals this week. However, a few negotiations are underway and may be finalised later in the week."

Challenges continue in the global market as inventories at Chinese ports have risen, primarily due to maintenance shutdowns at several steel mills. Furthermore, Chinese traders are reselling seaborne cargoes, which is negatively impacting Indian exports. Additionally, Australian special fines are favoured by Chinese buyers due to their cost-effectiveness.

Chinese spot, futures prices up w-o-w: The benchmark iron ore fines index inched up by $1$/t w-o-w to $102/t CFR China on 20 November. Participants remained cautious, assessing the impact of recent Chinese stimulus measures. Additionally, high port inventories and a strong USD dampened demand. Meanwhile, some Chinese steel mills reportedly resold cargoes in preparation for maintenance schedules amid the approaching winter season in the northern hemisphere.

Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract increased by RMB 21.5/t ($6/t) w-o-w to RMB 777.5/t ($104/t) on 21 November. Similarly, on a d-o-d basis, prices remained largely stable.

Meanwhile, iron ore inventories at China's major ports increased by 2.4 million tonnes (mnt) to 150.7 mnt on 21 November compared to last week, according to SteelHome data.

Price indicators

• One (1) deal was reported for this index and considered for price calculation. Therefore, T1 trade was given 0% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received sixteen (16) indicative prices in the current publishing window, and thirteen (13) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Outlook

According to the BigMint analysis, the export prices of iron ore fines may experience volatility due to some upward movement in global fines indices this week.