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Indian low-grade fines export index remains stable on weak Chinese demand

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Fines/Lumps

BigMint Bureau

838 Reads

29 Apr 2021, 19:41 IST

Indian low-grade fines export index remains stable on weak Chinese demand

SteelMint's weekly low-grade Indian iron ore fines (Fe 57%) export index remained largely stable at $92/t FOB east coast India in the recent deals reported. Demand for low grade ore continues to remain weak in China with discounts for low-grade ore widening to 34-35%. Three deals have been recorded by SteelMint this week which have been concluded by Odisha based miners & traders.

India low-grade fines recent trades -

Recently China's Ministry of Finance announced a new policy to remove export rebates for 146 steel products from 1st of May led to restrain iron ore demand. VAT reduction stimulates to ease out supply shortage of steel while discouraging steel exports. However, Chinese authorities indicate for another round of plant inspection of emission from the steel mills which may dampen demand for low-grade ore in near short term.

These factors may continue to encourage demand for medium and high-grade raw material in the upcoming days also.

Rationale:

Price indicators- Three confirmed deals were reported this week. All were considered for price calculation and kept the weightage 50% under T1 trade.
SteelMint has received ten (10) indicative prices and offers during the publishing window, and six (6) were considered for price calculation as T2 inputs and given a weightage of 50%.

Market highlights:

Spot iron ore prices fall after hitting a record high - China spot prices for Fe 62% fines picked up to $193.85/t, CNF China assessed on 27th Apr. The prices were hovering at over 10-year high levels due to rise in infrastructure demand. Similar price level was last witnessed towards Feb'11 at $196/t, CNF China. However, spot iron ore price came under pressure as China removes steel export VAT rebate led the spot price for Fe 62% fines fell by $3.4/t yesterday to $190.45/t CFR China.

Vessel freight remain stable- Vessel freight rates continue to stable for Supramax vessels from the east coast of India (Paradip port) to China $16-18 against last week.

Iron ore stocks at Chinese ports fall- Iron ore inventory at major Chinese ports remain declined by around 3 mn t to 133.1 mn t this week as compared with 135.9 mn t, a week before as per the data maintained by SteelHome.