India: Iron ore fines index recovers $3/t w-o-w amid improved market sentiments

• Global fines spot, future prices surge
  
  
• Sellers hold on to cargo in seaborne market
  
  
• Discounts for Fe57% Indian fines at 20-25%
  
  

The iron ore export market saw a slight increase in prices over the last few days, thanks to improved global fines spot and future prices and increased trades in China. However, no significant trades were reported in India.

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index rose by $3/tonne (t) w-o-w to $54/t FOB east coast on 12 September 2024. The discount level was recorded at 20-25% on the global fines index. A trader from Odisha concluded a fines (Fe57%) export deal for a 55,000 t vessel at $64/t CFR China a couple of days back. No other deals were recorded from India in the seaborne export market.

A trader said, "The recent increase of around $3-4/t in the export market was solely due to improved prices in the international market for iron ore fines. However, overall market sentiment for Indian materials remains negative, as buyers are inactive, and inquiries are being made at lower prices. Sellers are still cautious about making transactions."

According to sources, Indian traders are anticipating prices of around $75/t CFR China for Fe57% fines cargo. However, there is still a difference of around $8-10/t between bids and offers. Prices of single-mine cargoes have not touched the $70/t CFR level, which has led to market participants staying away for the next few days.

A market participant from Odisha said, "We are currently not finding it profitable to sell our materials in the international market, so we are offering them to domestic buyers. However, some buyers from India are looking to buy the material at lower prices, which would not cover our operational and logistics costs. While a few buyers have inquired about purchasing a single-mine cargo at $68-69/t CFR China, we have rejected these offers."

Iron ore inventories at China's major ports decreased by 1.1 million tonnes (mnt) to 149.4 mnt on 12 September, compared to the previous week, according to SteelHome data.

Indicators

• One (1) confirmed deal was reported from the east coast this week but not considered for price calculation as T1 trade. It was given a 0% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received seventeen (17) indicative prices in the current publishing window, and eleven (11) were considered for price calculation as T2 inputs and given 100% weightage.
  
  

Factors impacting the seaborne market

• Iron ore spot prices remain stable w-o-w: The benchmark iron ore fines remained stable w-o-w at $92/t CFR China on 11 September. Market participants held off on purchases or sales of existing inventories to gain clarity on future trends by October 2024. Most plants maintained low iron ore inventories to support operations for about 1-2 weeks.
  
  
• Portside offers in China go up w-o-w: Portside offers of Indian iron ore fines (Fe57%) in China rose by RMB 25/t ($3/t) w-o-w on 12 September. Offers were recorded at around RMB 545/t ($83/t) at Qingdao Port, including import taxes and port charges. Portside prices rose by RMB 10/t ($1/t) d-o-d today.
  
  
• DCE futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract increased by RMB 28.5/t ($4/t) w-o-w to RMB 707/t ($100/t) on 5 September. Future prices fell by RMB 13/t ($2/t) d-o-d against RMB 694/t ($98/t) yesterday.
  
  

Outlook

Seaborne iron ore export prices are expected to volatile because Chinese steel mills may be restock ahead of the national holidays in October.