India: SteelMint's iron ore export index declines to 2-month low

• Bid offers gap widen
  
  
• Indian sellers hold offers amidst falling global prices
  
  

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index decreased by $5/tonne (t) w-o-w to $83/t FOB east coast on 18 January 2024. The iron ore export index hit a two-month low level. Earlier, the price level was seen in the first half of November 2023. No deals were recorded from India in this publishing window. The price gap has been widened in the absence of deals.

Lower-grade iron ore fines offers in overseas markets decreased following the sluggish approach by Chinese buyers. The global iron ore and future prices fell this week ahead of the Lunar holiday which dropped Indian iron ore prices.

A miner from Odisha said: "The current price gap is wider between the buyers and sellers. Buyers are not interested in the offer prices by Indian miners and traders. As we heard in the market, the bid was even below $80/t FOB this week by a few buyers. The domestic iron ore prices are higher and at the current level of the export market, it is not viable for sellers to sell the material. We are holding the material."

A trader commented, "The market may see sluggishness throughout the Lunar New Year in the first week of February, indicating a volatile near-term outlook. Market participants are waiting for the OMC iron ore auction which is scheduled for 19 January."

On the other hand, a few Chinese steel sources reported that portside offers in China for Indian iron ore fines (Fe57%) had decreased by around RMB 30/t ($4/t). Today's offers were recorded at around RMB 810/t at ($114/t) Qingdao port inclusive of all import taxes and port charges.

Trading activity in China remained muted amid the shutdown of steel mills' blast furnaces following the margin concerns. The iron ore stock at ports increased after fall in demand amid operating mills cautious approach for any buying activities.

Price indicators:

• No deal was reported this week for fines Fe 57% from east coast and not taken into calculation. Thus, given 0% weightage. For detailed methodology Click here.
  
  
• SteelMint received ten (10) indicative prices in the current publishing window and seven (7) were considered for price calculation as T2 inputs and given 100% weightage.
  
  

Market highlights:

• W-o-w decline in global iron ore prices: The benchmark Fe 62% fines index decreased by around $6/t w-o-w to $128/t CFR China on 17 January. Prices fell amid poor Chinese downstream steel demand with sluggish macroeconomic factors. However, steel mills remained cautious about buying raw materials as they were still facing continuous losses amid poor steel margins. The slow restocking activity resulted from the lower liquidity of steel mills.
  
  
• DCE iron ore futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) contract for May 2024 sharply decreased by RMB 28/t ($4/t) to RMB 948/t ($134/t) on 18 January compared to last week.
  
  
• Iron ore port inventory in China increases w-o-w: Iron ore inventory at major Chinese ports rose by 4.3 mnt to 120.3 mnt on 11 January compared to the previous week, according to SteelHome data.
  
  

India's iron ore export shipments were recorded at 1,003,710 in the second week of January compared to 765,480 t in the first week of January, as per vessel line-up data maintained with SteelMint.

Outlook

The fines export market is expected to remain under pressure amid the absence of buyers. The Chinese steel mills' restocking activity before the Lunar holiday have almost been completed.