- 200,000 t export deals recorded from India
- Chinese economic policy supported the market
SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $2/tonne (t) w-o-w to $95/t FOB east coast on 4 January 2023. The iron ore export index was recorded at around 2.5 year-high, previously it was seen in the first half of June 2021. Three deals for export around 160,000 t of standard Fe (55-57%) fines were recorded for China at $92-96/t FOB east coast in this publishing window. However, another deal of 30,000 t fines (Fe51-56%) were recorded from western India to GCC in the last one week.
The iron ore export market in India remained in the higher side following the active deals at higher offers. As per sources, Chinese buyers booked lower grades iron ore amid higher prices despite low current steel margin.
A trader commented: "Anyone who wants to sell low-grade fines, can easily make a transaction following the boosted market confidence for lower grades. Most miners and traders sold their material in the export market in the last two to three weeks ahead of restocking activity in China before the Lunar Holidays. Demand for February shipments after the Lunar holiday was also seen in the market."
A miner from Odisha said that the availability of iron ore fines in the market is reducing as a few private miners were near to exhaust their EC (environment clearance) limits. Most miners sold the single mine cargo in the overseas market at decent offers compared to mixed material. However, buyers approached the discounted (around 13-14%) material more than the current offers.
An Eastern India-based trader said :"The majority of buyers were either buying the material or expressing interest in buying it because they expected a surge in demand in China's domestic market before the Lunar New Year vacation. The preference persisted for low-grade and medium-grade iron ore fines with lower margin levels."
The People's Bank of China said during its fourth-quarter 2023 meeting that the nation would be pushing up the execution of monetary measures to support economic development, which led to optimistic sentiments in the market.
Price indicators:
- Two deals were reported this week and one was taken into calculation. Thus, given 50% weightage. For detailed methodology Click here.
- SteelMint received nineteen (19) indicative prices in the current publishing window and fourteen (14) were considered for price calculation as T2 inputs and given 50% weightage.
Market highlights:
- W-o-w rise in global iron ore prices: The benchmark Fe 62% fines index increased by around $3/t on a w-o-w basis to $144/t CFR China on 3 January. The prices of iron ore fines in China were driven by robust demand and anticipated high liquidity in the Chinese economy. The recent interest rate cut by Chinese banks at the end of 2023 and expectations of enhanced financial market liquidity in the first quarter of 2024 have bolstered market confidence, indicating the nation's commitment to utilising monetary measures for swift economic development.
- DCE iron ore futures up w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) contract for May 2024 sharply increased by RMB 50/t ($7/t) to RMB 1,016/t ($143/t) on 28 December compared to last week. On a d-o-d basis, prices remained largely stable against RMB 1018.5/t (143/t) yesterday.
- Iron ore port inventory in China increases w-o-w: Iron ore inventory at major Chinese ports rose by 0.85 mnt to 114.5 mnt on 28 December compared to the previous week, according to SteelHome data.
India's iron ore export shipments were recorded at 1,075,752 in the last week of December compared to 1,224,860 t in the third week of the month, as per vessel line-up data maintained with SteelMint.
Notably, India exported 33 mnt of iron ore in CY'23. The top importer was China, accounting for a lion's share of shipments from India, followed by Indonesia, Malaysia, South Korea, and countries in the Middle East.
Outlook
Indian iron ore offers may remain supportive in the coming days amid boosted market confidence from Chinese buyers. The lower grade preference over premium material may also support the Indian iron ore offers in the export market.
