Indian low-grade fines export index range-bound, market sentiments bearish
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SteelMint's weekly low-grade iron ore fines (Fe 58/57%) FoB India index remained stable w-o-w post-holidays in China. SteelMint's index stands at $78/t FoB east coast India. However, with the consecutive decline in iron ore futures and spot prices, market sentiments have turned bearish.
Market participants reported an export deal to have concluded for Fe 57% fines at $90-91/t CFR China (equivalent to $79-80/t FoB India) towards the beginning of this week. But it could not be confirmed till the time of publishing this window.
Few traders highlighted that with a successive decline in Chinese spot iron ore prices, current market indications for Indian low-grade fines export stands at $1-2/t lower than the levels of $91-92/t assessed early this week. However, Indian domestic iron ore fines (Fe 57%) prices in Odisha is heard to be around INR 1,800/t ex-mines, incld Royalty.
Rationale: The index has been calculated using an average of T1 and T2 price inputs. Transactions confirmed by either a buyer/seller are designated as T1 input while bids, offers, and indicative prices are designated as T2 inputs. Both T1 and T2 categories of inputs carry 50% weightage each in price calculation for FOB price assessment.
Price indicators (T2) - SteelMint has received five indicative prices and offers during the publishing window. All inputs were considered for price calculation as T2 inputs, with an average price of $78/t FoB India.
Market overview - Chinese spot iron ore fines (Fe 62%) decreased sharply around $7/t w-o-w to $118.9/t against $125.85/t CFR China last week on 9th Oct amid sluggish demand and decline in futures.
Iron ore futures Jan'21 contract in Dalian Commodity Exchange fell by around RMB 43 w-o-w to RMB 787.5/t today. Singapore futures fell by $6 w-o-w to $118.9/t. China's rising port inventories and softening physical demand for steel products weighed on sentiment.
Iron ore inventory at major Chinese ports increased in the last week by 1 mn t to 123.6 mn t against 122.65 mn t a week ago.
