India: SteelMint's iron ore export index rises by $9/t w-o-w, 0.44 mnt trades recorded

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $9/tonne (t) on w-o-w basis to $83/t FOB east coast on 2 November, 2023. The low-grade export index was recorded to be over eight months high; previously, it was published at this level in the last week of February 2023. Two deals of Fe 57% fines were concluded at $94-96.5 CFR China by Eastern India-based miners in this publishing window. Another deal of 110,000 t of Fe54/55% fines was concluded at $86/t CFR China recently. A deal of 55,000 t low-grade exports was heard from the southern India region, but prices had not been disclosed, as sourced reported to SteelMint.

As per sources, iron ore export prices rose amid an enhanced buying offer from China this week. Some market participants sold material in the export market as the domestic fines market was under pressure and buying activity was sluggish amid the pre festive season.

An Odisha-based miner said, "The export market was improved this week for both low-grade fines and pellets, which have boosted market confidence as we were facing bid offer disparities in the domestic market in the last few days. However, we are worrying about the sustainability of current prices as some Chinese steelmakers reported that the import margin has shrunk for Indian material and will hesitate to buy above this level of pellet and low-grade fines."

The Indian iron ore export offers increased last week due to an increase in market activity, as interest in the seaborne market improved ahead of the arrival of winter in China and the expectation of a rise in steel output in the nation. A few mills in China were expected to increase production during the next two months in order to build a larger output base for next year.

However, some Chinese mills were hesitant to increase production for fear of government retaliation.

However, earlier last week deals were concluded at $80/t, CFR China from Odisha based players.

Price indicators

• Two (2) deals of Fe57% were reported this week and were taken into calculation. Thus, given 50% weightage. For methodology Click here.
  
  
• SteelMint received sixteen (16) indicative prices in the current publishing window and ten (10) 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 $5.35/t on w-o-w basis to $12.35/t CFR China on 1 November. Iron ore prices increased despite a drop in procurement activity. As per reports, seaborne prices have been supported by the combination of strong steel production levels and favorable liquidity downstream. Portside witnessed a sustained and strong buying interest, fueled by the continuous increase in domestic iron ore prices.
  
  
• DCE iron ore futures sharply up: Iron ore futures on the Dalian Commodity Exchange (DCE) for January 2024 contract increased by RMB 50/t ($7/t) to RMB 926.5/t ($127/t) on 2 November. Futures prices rose by RMB 7/t ($1/t) compared to RMB 919.5/t ($126/t) on 1 November.
  
  
• Iron ore port inventory in China falls: Iron ore inventory at major Chinese ports dropped by 0.25 mnt to 104.9 mnt on 26 October compared to the previous week, according to SteelHome data. Inventories have fallen to the lowest level since mid-July 2020.
  
  

India's iron ore export shipments were recorded at 438,730 t in the last week of October compared to 320,234 t in the third week, as per vessel line-up data maintained with SteelMint.

Outlook:

Low-grade iron ore offers are expected to remain supportive in the near term as sellers continue to receive inquiries from China and other regions. The positive market fundamentals of China may help the Indian iron ore fines offers in the export market.