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Indian low-grade fines export index drops by $11/t as bids from China subside

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Fines/Lumps

BigMint Bureau

1350 Reads

11 Mar 2021, 19:29 IST

Indian low-grade fines export index drops by $11/t as bids from China subside

SteelMint's weekly low-grade Indian iron ore fines (Fe 57%) export index has decreased sharply by $11/t w-o-w to $88/t FoB east coast India. Stringent environmental protection measures in Tangshan, China and drop in futures pulled down prices early this week.

Eastern India based miners/exporters had concluded decent number of deals last week at higher prices. With bids falling sharply this week, they remained less active in market and have adopted a 'wait & watch approach'.

However, today the market sentiments have slightly improved after rebound in futures. DCE's most-traded May iron ore futures contract today closed higher at RMB 1,093.5/t, up by RMB 53 ($8) against yesterday's closing.

Rationale:

Price indicators- Three confirmed trades were gathered by SteelMint, but only one was considered for price calculations and given a weightage of 50% under T1 trade as others were concluded towards end of last week.

SteelMint has received twelve (12) indicative prices and offers during the publishing window, and ten (10) were considered for price calculation as T2 inputs and given a weightage of 50%.

Spot iron ore fines price decrease $14/t w-o-w- Spot iron ore fines Fe 62% price decreased sharply by $14/t w-o-w. The Fe 62% fines price stood at $164.7/t yesterday as against $ 178.45/t a week ago. However, on d-o-d basis, prices inched up by around $1 yesterday.

Iron ore stocks at Chinese ports increase further- Iron ore inventory at major Chinese ports has increased to 130.9 mn t this week as compared with 129.5 mn t, a week before as per data maintained by SteelHome.
SteelMint China iron ore inventory

Soaring freight rates - Freight rates are on fireowing to less availability of cargo and hike in international oil prices. Brent oil futures (May contract) has increased to $69.02/bbl compared with $61.05/bbl a month back.Vessel freight rate for 50,000-55,000 t iron ore export vessels from east coast India (Paradip) to China increased to $ 25-26/t this week.

Domestic offers of low-grade iron ore soften- SteelMint's assessment for Indian low-grade iron ore fines (Fe 57%) fell marginally in this week. Prices stand at INR 3,500-3,800/t ($ 48-52/t, ex-mines, incl. Royalty, DMF and NMET) this week.