India: SteelMint's iron ore export index climbs to 7-month high on active trading

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $3/t w-o-w to reach $76/t FOB east coast on 19 October, 2023. The index reached a seven-month high level, with these levels last seen in the second-third week of March 2023. Two deals for a total of 110,000 t (Fe57%) were recorded from the east coast at $75-78.5/t FOB in this publishing window. As per sources, another 55,000 t of low-grade iron ore fines (Fe55/56%) were sold at $73/t FOB.

The Indian iron ore export market saw positive trends with offers from buyers increasing. Demand for Indian iron ore fines has increased after the Golden Week holidays in China.

Odisha-based merchant miner sources said that export realisations have improved and demand for low-grade ore has increased in the export market.

On the other hand, the recent price rise was due to market optimism following the introduction of stimulus measures by the Chinese government, while the market remained fundamentally slow. Chinese buyers are preferring medium- and low-grade fines after the holidays amid positive import margins.

Price indicators

• Two (2) deals of Fe57% were reported this week and one (1) was taken into calculation. Thus given a 50% weightage. For methodology Click here.
  
  
• SteelMint received fifteen (15) indicative prices in the current publishing window and eleven (11) were considered for price calculation as T2 inputs and given a 50% weightage.
  
  

Market highlights

• Global iron ore prices rise: The benchmark Fe 62% fines index increased by $2/t w-o-w to $118/t CFR China on 18 October. Despite a slight decrease in seaborne buying interest, medium-grade fines prices in the market were supported by healthy import margins. The possibility of talks regarding extensive production cuts in China may arise due to low margins.
  
  
• DCE iron ore futures improve: Iron ore futures on the Dalian Commodity Exchange (DCE) for January 2024 contract increased by RMB 34.5/t ($5/t) to RMB 871.5/t ($119/t) on 19 October. Futures prices rose by RMB 10.5/t ($1/t) compared to RMB 861/t ($118/t) on 18 October.
  
  
• Iron ore port inventory in China falls: Iron ore inventory at major Chinese ports fell by 2.6 mnt to 105.9 mnt on 8 October compared to 108.5 mnt on 28 September, according to SteelHome data. Inventories have fallen to the lowest level since mid-July 2020.
  
  

India's iron ore export shipments at ports were recorded at 612,501 t in the second week of October compared to 684,218 t in the first week of October, as per vessel line-up data maintained with SteelMint.

Outlook:

Low-grade iron ore offers in the export market may remain supported amid consistent demand. As per sources, the price level may increase or remain stable.