India: Iron ore fines export index stable amid sluggish market

• Lack of fines trades amid sluggish market
  
  
• Futures, spot iron ore prices remain under pressure
  
  

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $57/tonne (t) FOB east coast on 13 June 2024. No active deals were witnessed this week as most of the buyers were away from the market during the Dragon Boat festival holidays in China. However, an Odisha-based miner sold a few cargos at $72/t CFR China a couple of days ago but the transactions have yet to be confirmed from the seller's end. However, Fe 54% fines export price still stand at 35-36% discount to $59-60/t CFR China.

The Indian export market for iron ore fines remained under pressure this week amid lacklustre inquiries and weak market fundamentals in the domestic Chinese market. The exporters remained in wait-and-watch mode as current market floating prices made it not viable for them to sell lower-grade fines in the sea market. A few sellers reported that buyers demanded around 25-26% discount on the IODEX for the transaction but deals could not fetch successful bids.

An exporter said: "The sea market remained sluggish this week and didn't hear any spot transaction from India. The steel production cut in China for energy saving impacted the imported material and the demand was not witnessed at the Chinese ports for the lower grade fines. We are holding the offers and waiting for the improvement in market sentiments."

Following the current market dynamics in the seaborne market, the exporters are not interested in selling material at lower prices. The market may face southward sentiments as the rainy season approaches, impacting transportation and outdoor construction in South China, leading to an off-peak season for iron ore and steel demand.

Price indicators

• No confirmed deals were reported this week and not taken into price calculation under T1 trade and given 0% weightage in the index calculation. For detailed methodology Click here.
  
  
• BigMint received sixteen (16) indicative prices in the current publishing window and fourteen (14) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Portside offers in China of Indian iron ore fines (Fe57%) remained stable w-o-w on 13 June. Offers were recorded at around RMB 610/t ($85/t) at Qingdao Port, including all import taxes and port charges. Meanwhile, prices remained stable d-o-d amid improved landed margins.

The Chinese National Development and Reform Commission and five other departments jointly unveiled a special action plan aimed at reducing carbon emissions and conserving energy on 7 June meeting. The steel industry is one of the four main sectors for which this initiative sets specific action targets and intensifies efforts.

Iron ore inventories at China's major ports decreased by 0.7 mnt to 146.6 mnt on 13 June compared to the last week, according to SteelHome data.

Other highlights:

• Iron ore spot prices range-bound w-o-w: The benchmark iron ore fines index decreased w-o-w by around $1/t to $105/t CFR China on 12 June. The spot iron ore prices are driven by strong demand and improved landed margins.
  
  
• DCE futures drop w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2024 contract decreased by RMB 22.5/t ($3/t) w-o-w to RMB 817 ($114/t) on 13 June. However, prices improved by RMB 6.5/t ($1/t) d-o-d today.
  
  

Shipments down marginally: India's iron ore export shipments were recorded at 342,677 t in the first week of June, compared to 587,448 t in the last week of May, as per vessel line-up data maintained with BigMint.

Outlook

The seaborne export market may remain under pressure due to sluggish Chinese steel market sentiments in the recent days. The weather constraints in the Chinese region may impact the Indian lower-grade fines prices and demand.