India: BigMint's iron ore fines export index stays firm amid weak demand from China

• Bid-offer disparity widens for seaborne iron ore
  
  
• Cyclone Dana poses logistical hurdles in Odisha
  
  

Indian low-grade iron ore export prices remained range-bound amid tepid demand. Prevailing export offers were unviable for Indian suppliers, given the sharp surge in domestic prices. Meanwhile, Chinese buyers, facing poor sales margins and weak demand for finished steel, shifted towards cheaper alternatives.

BigMint's bi-weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $60/tonne (t) FOB east coast, India, on 24 October 2024, with no deals reported in this period. Exporters largely took a wait-and-watch approach, refraining from making deals, as they expected a potential increase in seaborne prices.

Participants were uncertain about the 20-25% discount on the global fines index, and Indian export offers dropped due to decreasing fines spot and future prices. The bid-offer disparity in the seaborne market increased to $10/t, making it nearly impossible to close deals.

Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract remained rangebound w-o-w at RMB 746/t ($105/t) on 24 October. On a d-o-d basis, prices rose by RMB 9/t ($1/t) today.

Additionally, in India's Odisha, Cyclone Dana disrupted vessel loading operations and the transportation of materials from mines to ports, exacerbating supply chain challenges for exporters.

A miner said, "We are currently encountering a challenge in selling iron ore in both the domestic and export markets due to low buying interest. The current price level in the seaborne market is not sustainable given higher domestic prices. We are aiming for export deals at $70/t FOB India, which is significantly higher than the prevailing prices for the next few days at least."

The potential imposition of sintering restrictions in China prompted steel mills to decrease their raw material inventories, further reducing demand for Indian ore and making imports less profitable for Chinese buyers.

Meanwhile, iron ore inventories at China's major ports increased by 0.5 million tonnes (mnt) to 147.65 mnt on 24 October compared to last week, according to SteelHome data.

Price indicators

• No deal was reported this week. Therefore, this category, 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 twelve (12) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Chinese spot prices fall w-o-w: The benchmark iron ore fines index decreased by $6/t w-o-w to $98/t CFR China on 23 October. Prices dropped due to weak steel margins and muted finished steel demand, with some mills utilising existing raw material inventories. Additionally, several cities in North China announced a level-2 emergency to combat air pollution, raising the likelihood of localised sintering restrictions. Market participants remained cautious amid these developments.

Outlook

Weak demand, logistical disruptions, and competitive pricing pressures will weigh heavily on the seaborne market for low-grade iron ore.