India: SteelMint's low-grade iron ore fines export index rises $2/t w-o-w

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $2/tonne (t) w-o-w to $72/t FOB east coast on 14 September, 2023. As per sources, one deal of 55,000 t was reported from the east coast at $85/t CFR China in this publishing window.

Another deal of 55,000 t (Fe55/56%) was also heard from the east coast at $65/t FOB Gopalpur to China this week.

Iron ore export prices increased following the hike in global iron ore prices and improved market sentiments for low-grade iron ore. Steel-makers in China are currently restocking inventory ahead of the mid-autumn holidays.

As Chinese mills' margins are shrinking, the demand for low and medium-grade fines has grown compared to high-grade material due to reasons of cost-effectiveness. Preferences of steel mills in Tangshan and Shandong have recently shifted towards low-grade fines. Bids from Chinese buyers have also increased amid positive market sentiments over the last few days.

Price indicators

• One deal was reported this week and taken into calculation thus, given 50% weightage. For methodology Click here.
  
  
• SteelMint received eleven (11) indicative prices in the current publishing window and nine (9) were considered for price calculation as T2 inputs and given 50% weightage.
  
  

Market highlights:

• DCE iron ore futures increase: Iron ore futures on the Dalian Commodity Exchange (DCE) for January 2024 contract rose sharply by RMB 24/t ($4/t) w-o-w to RMB 860.5/t ($118/t) on 7 September compared to RMB 836.5/t ($114/t) on 14 September.
  
  
• Global iron ore prices rise: The benchmark Fe 62% fines index increased by $4/t w-o-w to $122.5/t CFR China on 13 September. Prices remained supported on strong trading activity amid high operational rates of Chinese steel mills.
  
  
• China iron ore port inventory falls: Iron ore inventory at major Chinese ports fell by 2.9 million tonnes (mnt) to 115.9 mnt on 7 September compared to 118.8 mnt last week, according to SteelHome data.
  
  

India's iron ore export shipments at ports were recorded at 541,425 t in the first week of September compared to 791,030 t in the last week of August, as per vessel line-up data maintained with SteelMint.

Outlook:

Indian iron ore export offers are expected to remain firm in the coming days, as the approaching holidays may keep Chinese mills busy in restocking raw materials.