India: SteelMint's low-grade iron ore fines export index inches up

SteelMint's weekly India low-grade iron ore fines (Fe 57%) export index increased by $2/t w-o-w to $65/t FOB east coast, as assessed on 20 July 2023. No deal was heard due to lesser inquiries from the export market amid volatile sentiments.

According to sources, China's stimulus support expectation is driving a significant portion of demand and may support prices, going forward. The People's Bank of China (PBOC) expressed optimism about the nation's economy and property markets.

The deputy governor of PBOC said in a press conference that it does not see deflationary risks in the second half of the year which may improve the low-grade export market in the coming days.

India's iron ore export shipments rise w-o-w

India's iron ore export shipments were recorded at 707,143 t in the second week of July in comparison to 350,770 t in the first week of July, as per the vessel line-up data maintained with SteelMint.

Price indicators

• No deal was reported this week, thus, given 0% weightage. For methodology Click here.
  
  
• SteelMint received twelve (12) 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 rise w-o-w: The benchmark Fe 62% fines index increased by $3.45/t to $114/t CFR China on 19 July as compared to the previous week. As per market reports, the Chinese government may introduce some measures to boost the economy which triggered strong buying interest in the seaborne market. The improvement in import margins is also drawing some participants to favour seaborne stocks over portside.
  
  
• DCE iron ore futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2023 contract increased by RMB 20.5 ($3/t) w-o-w to RMB 849.5/t ($118/t) on 20 July (at 3 pm). Prices increased by RMB 15.5/t ($2/t) d-o-d.
  
  
• China port inventory edges down: Iron ore inventory at major Chinese ports decreased by 1.9 mnt to 123.3 mnt on 13 July compared to 125.2 mnt last week, according to SteelHome data. This level was last seen in the last week of September 2020, almost three years ago.
  
  

Outlook

Improved margins in China's finished steel segment may stimulate demand for the high-grade material. But, amid the monsoons, low-grade fines exports may remain under pressure. Market participants are mostly opting for a wait-and-watch approach.