Indian Low Grade Fines Export Prices Improve Following Global Price Hike

SteelMint in conversation with trade sources learned that prices for low-grade iron ore fines export from India has increased further by around USD 5-6/MT against last week's assessment. SteelMint's assessment for low grade (Fe 57/58%) iron ore fines prices at USD 72-75/MT, FoB India equivalent to USD 82-85/MT, CFR China.

Why low-grade iron ore fines hike?

1. Supply tightness and cost-effectiveness-: As per reports, Chinese steel mills are using more lower-grade iron ore, especially from India, amid supply tightness in the iron ore market, and reducing cost amid high raw material cost. Steel margins have been shrinking in China. Rio Tinto earlier this week indicated reduction of 13 MnT in its iron ore shipment guidance for CY19.

2. Spot iron ore fines index shoots-up 4 years high-: Spot iron ore prices increase amid shortage of supply concerns Fe 62% fines reached at 4 years high to USD 118/MT, CFR China yesterday on 20st Jun'19 against USD 109/MT, CFR, China a week before. That level of iron ore price last seen in April 2014.

3. Fall in iron ore inventory at Chinese Ports -: Inventory at major Chinese ports was recorded at 116.75 MnT towards 21st Jun, and dropped to lowest levels since mid Oct'17, according to data compiled by SteelHome consultancy. Inventory at ports keep decreasing from the last month amid high Chinese demand.

Indian iron ore exports inching towards 1.5 MnT in Jun'19 -: As per the vessel line up data maintained with SteelMint till 14th Jun'19, vessels carrying for around 1,432,915 MT iron ore lined for exports. Out of this 1,383,915 MT from Eastern port of India and rest 49,000 MT from other ports.