India: BigMint's iron ore fines export index stays favourable before Chinese Labour Day holiday

• Around 150,000 t of low-grade fines conclude
  
  
• Discounts are at around 25-26%
  
  
• Restocking activity surges before Labour Day
  
  

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index inched up by $0.5/t w-o-w to $65.5/t FOB east coast on 25 April 2024.

One deal of 55,000 t was recently heard for standard Fe 57% fines at $72/t FOB India from the Vizag port. Another eastern India-based miner sold around 110,000 t iron ore fines (Fe54%) earlier this week at a 34% discount on the IODEX index around $63-65/t CFR China. Few sellers' deals were under negotiation and there was only a $2-3/t disparity seen in the market.

India iron ore fines prices in the seaborne market remained supportive this week amid some positive inquiries from Chinese buyers. The demand for lower-grade fines from China was decent before the upcoming holiday.

An industry source from eastern India said: "There are reports of negotiations for some deals from the eastern coast. The Indian sellers and traders want to sell material this week as there is a holiday planned in China next week amid Labour Day. Few sellers even sold their materials at the prevailing level of prices. However, the Indian exporter is still holding the material as they are expecting a hike in prices in the near term."

The benchmark iron ore fines index edged up by $2/t w-o-w to $119/t CFR China on 24 April. Seaborne iron ore prices rose amid pre-holiday restocking demand. As per the report, the renewed interest from steel mills in restarting operations resulted a surge in demand for iron ore.

A miner said, "We are under negotiation with buyers and there was an increase in the inquiries from buyers. We have decent stocks at the ports. However, for Fe 57% fines, the discount is around 25-26% while buyers demanded 32-34% for the below 55% grade material."

A few sources said that there is still confusion in the market as exporters could not crack the right prices to sell amid the highly fluctuating Chinese market in the last few trading days.

On the other hand, portside offers in China for Indian iron ore fines (Fe57%) rose by RMB 10/t ($1/t) w-o-w on 25 April. The offers were recorded at around RMB 665/t ($93/t) at Qingdao Port, inclusive of all import taxes and port charges.

Market interest in seaborne trade primarily centred on low-grade fines rather than pellets and lumps. Steelmakers stocked up materials prior to the Labour Day holiday, leading to an increase in inventory levels at Chinese ports.

Notably, iron ore inventories at China's major ports increased by 1.5 mnt to 144.6 mnt on 25 April compared to the last week, according to SteelHome data.

Other highlights:

• DCE iron ore futures largely stable: Iron ore futures on the Dalian Commodity Exchange (DCE) for the September 2024 contract inched up by RMB 5.5/t ($1/t) w-o-w to RMB 879.5 ($122/t) on 25 April. Prices inched down by RMB 8.5/t ($8.5/t) on a d-o-d basis.
  
  
• India iron ore shipment up w-o-w: India's iron ore export shipments were recorded at 470,790 t in the third week of April, compared to 313,620 t in the last week, as per vessel line-up data maintained with BigMint.
  
  

Price indicators:

• No deal was reported this week for fines Fe 57% from the east coast ports, so not taken into consideration for calculation and was thus given 0% weightage. For detailed methodology Click here.
  
  
• BigMint received twenty-one (21) indicative prices in the current publishing window and fifteen (15) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Outlook

The seaborne export market for Indian iron ore fines is expected to remain volatile amid restocking activity in China ahead of the Labour Day holiday.