India: SteelMint's low-grade iron ore fines export index stable, market inactive

SteelMint's weekly India low-grade iron ore fines (Fe 57%) export index remained stable w-o-w at $58/t FOB east coast, as assessed on 17 August 2023. No deal concluded in this publishing window. As per sources, there is still a huge gap between bids and offers which is not supporting the physical market. However, the market has improved today on a d-o-d basis.

Indian sellers are currently waiting for a decent price level to sell their material and are not in a rush to liquidate their stocks in the seaborne market now. The current market is not clear yet and rates are also not feasible, so market participants remained cautious about putting their material in the export market.

As per Chinese reports, "There have been no formal announcements on production restrictions, and there are currently rumours that the policy may not even be implemented. As a result, swap prices are rising, but before acting, we are still watching what occurs."

Price indicators

• No deal was reported this week and not taken into calculation thus, given nil weightage. For methodology Click here.
  
  
• SteelMint received eleven (11) indicative prices, bids, and offers in the current publishing window and ten (10) were considered for price calculation as T2 inputs and given a 100% weightage.
  
  

Market highlights

• Global iron ore prices stable: The benchmark Fe 62% fines index remained largely stable w-o-w at $104.45/t CFR China on 16 August. Macro-economic factors and Chinese bank economic policy kept iron ore prices pressurized. However, Chinese steel mills have a strong buying interest in the seaborne market than portside due to consistent operation rates and healthy import margins at the start of this week. Portside prices dipped on potential sintering cut news by Tangshan mills.
  
  
• DCE iron ore futures rise: Iron ore futures on the Dalian Commodity Exchange (DCE) for January 2024 contract increased by RMB 15.5/t ($2/t) w-o-w to RMB 738.5/t ($101/t) on 16 August compared to RMB 723/t ($99/t) last week. However, prices remained stable d-o-d.
  
  
• China port inventory significantly down: Iron ore inventory at major Chinese ports decreased by 4 mnt to 116.5 mnt on 10 August compared to 120.5 mnt last week, according to SteelHome data. This is the lowest level of Chinese iron ore inventory in the last three years. The previous was recorded in the first half of August 2023 at 116 mnt.
  
  

India's iron ore export shipments were recorded at 439,868 t in the second week of August compared to 713,479 t in the first week of August, as per vessel line-up data maintained with SteelMint.

Outlook

There is still not much clarity in the market on the back of unclear policies in China. Therefore, in the coming days, the market is expected to be volatile. However, some improvement can be seen in index prices.