India: SteelMint's low-grade iron ore fines export index falls to over 2-month low

SteelMint's weekly India low-grade iron ore fines (Fe 57%) export index decreased by $2/t w-o-w to $58/t FOB east coast, as assessed on 10 August 2023. Notably, the index has fallen to a two-month low: prices had declined to these levels last on 25 May, as per data maintained by SteelMint. Uncertain market trends in China have impacted the low-grade export market, as bids from China are quite low and unviable for Indian sellers.

As per an Indian iron ore exporter, "Market offers are low and not at all stimulating for sellers. However, there is a possibility of the market reviving after mid-October."

According to several sources, prices for major steel products in China have remained relatively high, and many traders would prefer to wait for clearer market trends to emerge before trading in the seaborne market for raw materials. At the same time, availability of iron ore in the domestic market is also a concern during monsoons.

Meanwhile, some reports have pointed out that economic data are not very positive, which has impacted market players' confidence and instilled caution in them.

Price indicators

• No deal was reported this week and not taken into calculation thus, given a 0% weightage. For methodology Click here.
  
  
• SteelMint received twelve (12) indicative prices, bids, and offers 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 fall: The benchmark Fe 62% fines index fell significantly by around $5/t w-o-w to $104.8/t CFR China on 8 August. Iron ore (Fe 62%) fines spot prices decreased due to extreme weather conditions in different cities. Some regions in North China remain affected by floods and heavy rains which are weighing on construction steel as well as iron ore demand.
  
  
• DCE iron ore futures fall w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for January 2024 contract declined sharply by RMB 95.5/t ($13/t) w-o-w to RMB 714.5/t ($99/t) on 10 August (at 3 pm). Prices decreased by RMB 8.5/t ($1/t) d-o-d.
  
  
• China port inventory edges down: Iron ore inventory at major Chinese ports decreased by 1.3 mnt to 120.5 mnt on 3 August compared to 121.8 mnt last week, according to SteelHome data.
  
  

However, India's iron ore export shipments were recorded at 713,479 t in the first week of August compared to 647,592 t in the last week of July, as per vessel line-up data maintained with SteelMint.

Outlook

The low-grade iron ore export market may remain volatile in coming days due to lack of clarity in the China market amid news of possible steel production cuts and weak macroeconomic outlook.