India: SteelMint's iron ore export index rises marginally amid active buying from Chinese buyers

• Re-stocking activity increased before the Lunar holidays
  
  
• 340,000 t export deals recorded from India
  
  

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $1/tonne (t) w-o-w to $93/t FOB east coast on 28 December, 2023. The iron ore export index recorded around 2.5 year-high, previously; it was seen in the first half of June 2021. No deals of standard Fe57% fines were recorded for export from the East Coast in this publishing window. However, total deals of 340,000 t fines (Fe54-57%) were recorded from eastern and southern India in the last one week for exports.

Market sources reported that low-grade fines demand increased in the overseas market as buyers aggressively booked material for stock before the Lunar holidays. Most of the market participants preferred Indian low-grade fines as Chinese still mills faced negative profit margins for higher-grade iron ore. Offers from eastern India for Fe 57% fines were heard around $110/t CFR, while bids were around $106-108/t CFR.

An Odisha-based miner said, "Buying activity in the overseas market increased and Indian sellers getting decent offers for material for January shipment. Improved global prices in the last one week also supported the low-grade fines offers. Some ready-to-load cargoes getting extra prices against the third week of January shipment cargo."

As per reports, because of Chinese steel mills' unsustainable profit margins, demand in the country is now limited to low and medium-grade iron ore fines.

Another trader said "We heard some deals concluded above $90/t FOB while one or two deals heard below $90 also which shows that Chinese buyers are highly interested in booking lower and medium-grade material from India. As only a few mills imposed limits on mills for environmental reasons, the majority of mills in China continued to use sinter-feed may give support to iron ore prices in the coming days."

Price indicators:

• No deal was reported this week and taken into calculation. Thus, given 0% weightage. For detailed methodology Click here.
  
  
• SteelMint received eighteen (18) indicative prices in the current publishing window and eleven (11) were considered for price calculation as T2 inputs and given 100% weightage.
  
  

Market highlights:

• W-o-w rise in global iron ore prices: The benchmark Fe 62% fines index increased by around $6/t on a w-o-w basis to $141/t CFR China on 27 December. The prices of iron ore fines in China increased due to high demand for re-stocking by steelmakers before the Chinese New Year holidays. Market participants expect this re-stocking trend to continue until early January, followed by a surge in demand in the portside market.
  
  
• DCE iron ore futures stable w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) contract for May 2024 remained largely stable at RMB 966/t ($137/t) on 28 December compared to last week. On a d-o-d basis, prices sharply decreased by RMB 18.5/t ($3/t) against RMB 985.5/t (137/t) yesterday.
  
  
• Iron ore port inventory in China stable w-o-w: Iron ore inventory at major Chinese ports remained stable at 113.65 mnt on 21 December compared to the previous week, according to SteelHome data.
  
  

India's iron ore export shipments were recorded at 1,224,860 in the third week of December compared to 734,364 t in the second 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 enhanced re-stocking activities before the Chinese Lunar New Year holidays. The mills' margins also supported the lower-grade fines demand in the seaborne market. Indian sellers expect that the current price level will rise or sustain for the coming few days.