India: SteelMint's low-grade iron ore export index remains stable, market quiet

SteelMint's weekly India low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $60/tonne (t) FOB east coast on 11 May, 2023. The market remained sluggish this week also as export participants are not getting bid-offer disparity. Hence, they have opted for the wait-and-watch mode.

However, a deal of 55,000 t low-grade iron ore (Fe56-57%) was concluded by an Odisha-based trader at $76/t CFR China this week.

According to sources, the market indicated weak demand because of falling finished steel prices in China under decent inventory. In addition, recently Chinese government released the first production cut directive to reduce crude steel output.

India's iron ore export shipments fall

India's iron ore export shipments were recorded at 431,325 t in the first week of May in comparison with 741,042 t in the last week of April, as per vessel line-up data maintained with SteelMint.

Price indicators

• One deal was reported so far this week and taken into account for price calculation under T1 trade and given 0% weightage.
  
  
• SteelMint received thirteen (13) indicative prices, bids, and offers in the current publishing window and nine (9) were considered for price calculation as T2 inputs and given 100% weightage.
  
  

Market highlights

• Global iron ore prices edge up: The benchmark Fe 62% fines index increased by $1.3/t to $107.5/t CFR China on 10 May compared to the previous week. Seaborne iron ore prices rose after a flurry of trade activity for medium-grade fines. Future gains in import margins might be limited. Steel mills almost finished restocking at the portside after the Labour Day holidays. But most of the steel mills continued need-based buying due to high operation rates.
  
  
• DCE iron ore futures stable w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2023 contract closed at RMB 698.5/t on 11 May (at 3 pm), remaining stable w-o-w. However, prices decreased by RMB 25.5/t d-o-d compared to RMB 724/t on 10 May.
  
  
• Port inventory in China drops: Iron ore inventory at major Chinese ports fell by 0.6 mnt to 129.2 mnt on 4 May compared to 129.8 mnt last week, as per SteelHome data.
  
  

Outlook:

High inventory amid low demand followed by Chinese government's first production cut directive released this week may keep prices under pressure.