India: SteelMint's low-grade iron ore fines export index falls as global prices hit 6-month low

SteelMint's weekly India low-grade iron ore fines (Fe 57%) export index decreased by $8/t w-o-w to $57/tonne (t) FOB east coast on 25 May, 2023. The index moved down following the global cues such as falling futures and a 6-month low global iron ore fines (Australian origin, Fe 62%) prices.

The liquidity in the market is weak due to lack of buying which has put off sellers from trading in the market. Majority of Chinese mills are procuring on a need basis because of thinning profit margins and declining steel prices.

As per sources, the gap between offer and bid is also getting wider. Steelmakers are uncertain about the demand outlook and thus are looking to buy raw material at low prices considering falling margins.

According to reports, more than 50% of Tangshan mills are currently losing money. Despite recent price reductions, there is relatively little demand for steel.

India's iron ore export shipments fall

India's iron ore export shipments were recorded at 335,670 t in the third week of May in comparison with 659,875 t in the second week of the month, as per vessel line-up data maintained with SteelMint.

Price indicators

• No deal was reported this week for price calculation under T1 trade and given 0% weightage, for methodology Click here
  
  
• SteelMint received eleven (11) 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 fall sharply: The benchmark Fe 62% fines index fell sharply by $13.65/t to $97.35/t CFR China on 24 May compared to the previous week. Weak demand fundamentals, liquidity issues and slow trading activity dragged down seaborne iron ore prices.
  
  
• DCE iron ore futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2023 contract closed at RMB 681/t on 25 May (at 3 pm), down by RMB 65.5/t ($9/t) w-o-w. However, prices remained largely stable d-o-d compared to RMB 682.5/t on 24 May.
  
  
• China port inventory drops: Iron ore inventory at major Chinese ports decreased by 1.35 mnt to 126.95 mnt on 18 May compared to 128.3 mnt last week, as per SteelHome data.
  
  

Outlook

Lack of buying interest from China has made India's low-grade iron ore fines export market bearish. Amid the current scenario, market participants are concerned about a recovery in export prices.