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India: Iron ore fines index rises $5/t w-o-w on improved sentiments

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Fines/Lumps

BigMint Bureau

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29 Aug 2024, 19:48 IST

India: Iron ore fines index rises $5/t w-o-w on improved sentiments

Indian exporters are holding back their offers

Iron ore port inventories in China rise w-o-w

Discount for Fe57% Indian fines stands at 24-25%

Iron ore fines prices showed some improvement in the seaborne market over the week, but no deals were reported from Indian sellers due to a lack of buyers in the export market. Indian exporters are holding back their offers, despite low buying interest from the Chinese market, as they wait for better selling opportunities.

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $4.5/tonne (t) w-o-w to $58.5/t FOB east coast on 29 August 2024. Despite the price improvement, no major transactions were concluded by exporters during this period. Buyers recorded a discount of 24-25% on the global fines index for Indian fines, which was not favourable for successful transactions from the east coast of India. Sellers are currently holding out for a discount closer to 20%.

A trader said that the recent surge in export prices was just on paper as no physical deals were reported in the seaborne market from India. Exporters faced a lack of buying interest from Chinese mills, as the offered prices were still not viable given the current market fluctuations. Iron ore inventories at China's major ports rose by 1.6 million tonnes (mnt) to 150.8 mnt on 29 August, compared to the previous week, according to SteelHome data.

On the other hand, Chinese mills are showing an increased willingness to purchase spot cargo, possibly in anticipation of restocking before the Mid-Autumn and National Day holidays. There is also an expectation that some blast furnaces may resume production next week, potentially causing a rebound in iron ore and finished steel prices.

Indicators

No confirmed deal was reported from the East Coast this week and taken into price calculation under T1 trade and given 0% weightage in the index calculation. For detailed methodology Click here.

BigMint received fifteen (15) indicative prices in the current publishing window and thirteen (13) were considered for price calculation as T2 inputs and given 100% weightage.

Factors impacting the seaborne market-

Iron ore spot prices up w-o-w: The benchmark iron ore fines rose by $2/t w-o-w to $100/t CFR China on 28 August. This surge was driven by positive market sentiments, bolstered by favourable macroeconomic indicators. The U.S. Federal Reserve recently hinted at a potential rate cut in September, raising expectations for improved market liquidity. Additionally, anticipation of supportive economic policies from China has contributed to the optimistic market outlook.

Portside offers in China up w-o-w: Portside offers of Indian iron ore fines (Fe57%) in China rose by RMB 20/t ($3/t) w-o-w on 29 August. Offers were recorded at around RMB 575/t ($80/t) at Qingdao Port, including all import taxes and port charges. D-o-d, portside prices inched up by RMB 5/t ($1/t) today.

DCE futures up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract increased by RMB 30/t ($4/t) w-o-w to RMB 760/t ($107/t) on 29 August. D-o-d, future prices inched up by RMB 5.5/t ($1/t) against RMB 754.5/t ($106/t) yesterday.

Outlook

Seaborne iron ore export prices are expected to remain supported as demand may increase ahead of the Chinese holidays. Buyers are also awaiting the announcement of an Australian miner's discount, which is expected to be released soon.