India: Low-grade iron ore export prices up marginally, trade subdued

SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) increased slightly by $2/t, w-o-w, to $39/t FOB east coast India.

The uncertainty on steel production curbs weighed on iron ore demand after production cuts were heard in Shanxi province. Procurement turned cautious as buyers opted to wait for clearer signals in the market.

Waning restocking demand led to a weaker price trend after the post-holiday rally.

The reports of power cuts affecting steel production in China over the past weeks were digested by the market slowly, and weighing on the seaborne market. The country's steel production curbs kept sentiments bearish over the long run.

"Indian iron ore fines Fe 57% export price indications should be around $65-70/t, CFR China. However, bids are heard at around $60/t but the level is not viable," told a trader. Trade sources said there is very limited buying interest for low grade ore currently.

As per data maintained with SteelMint, total iron ore exports from Indian ports for the week (3 Oct-9 Oct) continued to remain nil.

Rationale:

• Price indicators- No confirmed deal was reported in the current publishing window and hence given 0% weightage under T1 trade.
  
  
• SteelMint received six (6) indicative prices and offers during the current publishing window, and five (5) were considered for price calculation as T2 inputs, given weightage of 100%.
  
  

Market highlights:

• Spot iron ore fines prices up $8.2, w-o-w: The spot price of benchmark iron ore Fe 62% fines increased by $8.2/t w-o-w to $126/t CFR China on 14 Oct. On a daily basis too, prices marked an increase of $2.4/t. Iron ore futures on Dalian Commodity Exchange remained largely stable d-o-d. DCE iron ore futures Jan'22 contract closed at RMB 736/t ($114) (+RMB 5).
  
  
• Iron ore stocks rise at Chinese ports: Iron ore inventory at major Chinese ports increased to 139.7 million tonnes (mn t) this week as against 133.7 mn t last week, as per data maintained by SteelHome.