India: Iron ore fines export prices remain stable, participants cautious

• Discount widened for iron ore
  
  
• Lack of trade witnessed for exports
  
  
• No improvement from China's "Two Sessions" meeting
  
  

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $74/t FOB east coast on 7 March 2024. A deal of 100,000 t iron ore fines (Fe57%) was concluded at $89/t CFR China in the early days of this week. Few deals were heard under negotiations but couldn't completed at the time of publication of this article.

The iron ore fines export market performed better than raw pellet as inquiries were received from the buyers at a discount on the index. However, only a few deals were concluded this week due to lower feasible prices for the traders and miners. Market participants remained cautious about selling the material at lower prices.

Few sources reported that inquiries for iron ore fines were improved this week compared to last week as Chinese buyers preferred lower-grade material. However, they demanded around 15-18% discount which was not accepted by all the sellers. Few traders sold the material at the same discount as they were expecting that prices may fall from this level in the coming days.

A prominent Australian miner has expanded discounts for the special brand of Fe 56.5% fines term contracts. The discounts for Fe 56.5% fines increased from 6% in February to 7% in March.

A trader said, "Most of the exporters remained in the wait-and-watch mode and holding the offers. The ready-to-load cargo was still getting better opportunities for March-end shipments. We had enough stock at ports to export but believing from the market sentiments that offers will improve in the coming days. So currently we're not in a hurry to make any transactions in the overseas market."

On the other hand, a few Chinese steel sources reported that portside offers in China for Indian iron ore fines (Fe57%) decreased by RMB 20/t ($3/t) w-o-w on 7 March. The offers were recorded at around RMB 725/t ($102/t) at Qingdao Port inclusive of all import taxes and port charges.

The Chinese portside prices fell for imported ore but buying interest was increased at lower offers. Most buyers opted for the purchasing of low-grade fines to reduce the steelmaking cost.

According to some reports, North Chinese mills adopted environmental control measures during the "Two Sessions" meeting, which had an impact on the sintering operating rate. However, the impact of the sintering feed restrictions will be minimal following the current market fundamentals.

Notably, iron ore inventories at China's major ports rose by 3.3 mnt to 138.2 mnt on 6 March compared to last week, according to SteelHome data. For another time in about one year, the iron ore inventory has hit a one-year high. The last time such levels were reached was in the first week of Mach 2023.

Other highlights:

• Global iron ore prices stable w-o-w: The benchmark Fe 62% fines index remained largely stable w-o-w at $118/t CFR China on 6 March. There were some procurement operations observed in the market for cargoes scheduled for delivery in April, as mills that needed to restock their inventory inquired about seaborne feedstocks. However, weak downstream steel demand and low operation rates along with maintenance shutdown by some mills kept prices under pressure at the start of the week.
  
  
• DCE iron ore futures stable w-o-w: The iron ore futures on the Dalian Commodity Exchange (DCE) for the May 2024 contract remained stable w-o-w at RMB 890/t ($124/t) on 7 March compared to last week. However, on a d-o-d basis, prices inched up by RMB 8.5/t ($1/t) today.
  
  
• India iron ore shipment falls w-o-w: India's iron ore export shipments were recorded at 793,331 t in the last week of February compared to 1,003,015 t in the fourth week of February, as per vessel line-up data maintained with BigMint.
  
  

Price indicators:

• One deal was reported this week for fines Fe 57% from the East Coast and taken into consideration for calculation. Thus, given 50% weightage. For detailed methodology Click here.
  
  
• BigMint received seventeen (17) indicative prices in the current publishing window and fifteen (15) were considered for price calculation as T2 inputs and given a 50% weightage.
  
  

Outlook:

The fines export market may remain supported in the coming days following the interest of Chinese buyers for the low-grade fines. However, China's two-session meeting was not in the favour of market participants as some reports claimed.