India: Iron ore fines index rises $8/t w-o-w on improved trades, global price hike

• Global fines spot, future prices rise sharply w-o-w
  
  
• Discounts on Fe 57% Indian fines narrow to 19-20%
  
  

The Indian lower-grade fines market showed positive trends this week, with active trades at higher prices in the seaborne market due to improved sentiments in China. The recent price hikes in the global fines spot and future markets also supported Indian exporters' offers.

BigMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $7.5/tonne (t) w-o-w to $60.5/t FOB east coast on 26 September 2024. The discount level dropped this week, with reductions offered at 19-20% on the global fines index.

The Indian iron ore fines export market regained its momentum in the last couple of days. Deals for Fe 57.5% fines concluded at $75-76/t CFR China, and Fe 54.5% fines cargoes were sold at a 22% discount on the international fines index.

Traders said, "We are currently receiving offers at $75-76/t CFR China for Indian iron ore Fe 57% cargo, but bids are slightly lower."

The recent stimulus announcement has had a positive impact on the domestic ferrous commodities markets, leading to an increase in imported iron ore prices. This action comes after Beijing announced its largest stimulus package since the pandemic. The package includes rate cuts and easing of mortgage requirements, to revitalise economic activity and stabilise the crisis-affected property market.

Iron ore inventories at China's major ports decreased by 0.7 million tonnes (mnt) to 145.9 mnt on 26 September, compared to the previous week, according to SteelHome data.

Indicators

• Three (3) pellet export deals were recorded this week, in which two (2) deals were taken into consideration for price calculation. Hence, T1 trade was accorded 50% weightage in the index calculation. For the detailed methodology, click here.
  
  
• BigMint received sixteen (16) indicative prices in the current publishing window, and ten (10) were considered for price calculation as T2 inputs and given 50% weightage.
  
  

Factors impacting the seaborne market

• Iron ore spot prices up w-o-w: Benchmark iron ore fines increased by $6/t w-o-w to $96/t CFR China on 25 September. Prices rose this week amid stimulus announcement news from the country. The central bank's decision to cut the reserve requirement ratio by 50 basis points, along with plans to reduce interest rates, has significantly boosted market sentiment by introducing long-term liquidity and reducing borrowing costs.
  
  
• Portside offers in China rise w-o-w: Portside offers of Indian iron ore fines (Fe 57%) in China rose by RMB 45/t ($6/t) w-o-w on 26 September. Offers were recorded at around RMB 565/t ($86/t) at Qingdao Port, including import taxes and port charges. Portside prices inched up by RMB 5/t ($1/t) d-o-d today.
  
  
• DCE futures increase w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for the January 2025 contract rose by RMB 35/t ($5/t) w-o-w to RMB 728/t ($104/t) on 26 September.
  
  

Outlook

Seaborne iron ore export prices are expected to remain positive amid rising global spot and future prices, alongside improved demand from China following recent stimulus measures. With discounts narrowing and portside offers increasing, market sentiment suggests further price gains in the short term ahead of the Chinese Golden Week holidays.