India: SteelMint's iron ore export index stays flat amid lack of trade

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $83/t FOB east coast on 9 November, 2023. No deal was heard in this publishing window amid mixed sentiments in the market. However, some deals were under negotiation but not concluded till the publication of this assessment.

The Indian iron ore export market remained supported amid improved global spot and futures prices. Offers have remained firm over the last two weeks. However, no deal was concluded this week amid preference for high-grade material such as lumps and pellets from Chinese mills. Most of the buyers booked raw pellets from India as they were getting better margins against low-grade fines.

Indian exporters stated that market sentiments have been high over the last few days but not enough to conclude deals. However, sellers took an aggressive approach and did not reduce offers, which were at around $93-95 CFR China. However, as per sources, discounts for iron ore has also increased amid lack of deals.

As per reports, mills in China are switching to better quality materials to reduce CO2 emissions and pollution during the winter season. Therefore, the seaborne market for low-grade ore has remained sluggish.

Price indicators

• No deal of Fe57% was reported this week and so not taken into calculation. Thus, given 0% weightage. For 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 a 100% weightage.
  
  

Market highlights

• Global iron ore prices rise: The benchmark Fe 62% fines index increased by $3/t on a w-o-w basis to $128/t CFR China on 8 November. Iron ore prices increased amid restored market confidence and improved steel demand. As per reports, even though there is a greater need for steel, the rising price of iron ore has diminished buying interest as mills struggle to maintain their profit margins.
  
  
• DCE iron ore futures edge up: Iron ore futures on the Dalian Commodity Exchange (DCE) for January 2024 contract increased by RMB 12.5/t ($2/t) to RMB 939/t ($129/t) on 9 November. Futures prices rose by RMB 4/t ($1/t) compared to RMB 935/t ($128/t) on 8 November.
  
  
• Iron ore port inventory in China rises: Iron ore inventory at major Chinese ports increased by 2.1 mnt to 107 mnt on 2 November compared to the previous week, according to SteelHome data.
  
  

India's iron ore export shipments were recorded at 629,400 t in the first week of November compared to 438,730 t in the last week of October, 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.