India: SteelMint's iron ore export index rises $3/t; over 200,000 t of deals concluded

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $3/tonne (t) w-o-w to $90/t FOB east coast on 14 December, 2023. Two deals of standard Fe 57% were recorded in this publishing window. However, a trader from Odisha concluded an 80,000 t deal for Fe 57% grade iron ore fines recently from the west coast of India.

A few traders from the East Coast sold their material at firm offers this week, while other deals were under negotiation. Inquiries for Indian low-grade iron ore fines have increased as most of the overseas buyers have shifted to iron ore fines instead of pellets. As per sources, market fundamentals have improved in the export market amid positive response from buyers, and in the next few days, deals will increase amid enhanced demand.

An East-Indian-based trader said, "Current low-grade offers in the overseas market are quite impressive, and everyone wants to sell material at higher offers. On the other hand, single-mine material gets a premium price, which is higher by around $2-3/t compared to other materials. As per market inputs, the current discount is around 16-18% for low-grade fines in the overseas market."

Some sources expect demand for iron ore pellets and other raw materials to be higher in January because of restocking demand in China ahead of the Lunar New Year holidays in the first week of February. Also, if China continues to export finished steel in the upcoming quarter, it may aid the recovery of steel margins and eventually demand for raw materials, which may help Indian raw material prices in overseas markets.

Price indicators:

• Two deals were reported this week and taken into calculation. Thus, given 50% weightage. For detailed methodology Click here.
  
  
• SteelMint received twelve (12) indicative prices in the current publishing window and nine (9) 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 rose by around $3/t on a w-o-w basis to $136/t CFR China on 13 December. Presently, some steel mills hold sufficient iron ore stocks for two to three days of production. To optimise costs, mills are adjusting their usage of various sintering blends, prioritising more cost-effective options due to their enhanced flexibility.
  
  
• DCE iron ore futures edge down w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) contract for May 2024 inched down by around RMB 10/t ($1/t) to RMB 942/t ($133/t) on 14 December compared to last week. On a d-o-d basis, prices fell slightly by RMB 6/t ($1/t) against RMB 948/t (134/t) yesterday.
  
  
• Iron ore port inventory in China up w-o-w: Iron ore inventory at major Chinese ports slightly increased by around 2.6 mnt to 113.3 mnt on 7 December compared to the previous week, according to SteelHome data.
  
  

India's iron ore export shipments were recorded at 1,158,898 t in the first week of December compared to 814,950 t in the last week of the month, as per vessel line-up data maintained with SteelMint.

Outlook

Indian iron ore offers may remain supportive in the coming days amid restocking activities before the Chinese Lunar New Year holidays.