SteelMint: India low-grade iron ore export index continues to fall on thin trading

SteelMint's weekly export index for low-grade Indian iron ore fines (Fe 57%) decreased by $2/t, w-o-w, to $25/t FOB east coast India. Trading remained muted on lower export realisations.

The Indian iron ore exports market continues to remain dull amidst declining Chinese demand. Demand from end-users is low due to ongoing steel production curbs and stricter sintering and blast furnace operation restrictions in the northern stretches of China.

Previously, when steel margins and coke prices were high, mills were using high-grade ore and direct blast furnace feed such as pellet and lump. However, now that margins and coke prices are both coming off, mills may switch to blends of low-grade iron ore fines.

It is expected that amongst the low, medium and high-grade fines, the demand for high-grade fines would be affected the most and the demand for low-grade fines could improve amidst weakening steel margins. Also, demand for discounted medium-grade fines is expected to rise.

"Indian iron ore Fe 57% fines export price indications are heard at around $40-45/t, CFR China. But no deals have been heard", shared a trader.

The spot price of benchmark iron ore Fe 62% fines decreased by $5.5/t, w-o-w, on 11 Nov to $94.2/t CFR China as against $99.7/t a week ago. However, the prices picked up d-o-d basis as compared to $89.5/t assessed on 10th Nov'21. DCE iron ore futures' Jan'22 contract closed at RMB 570.5/t ($89.18) (+RMB 34), d-o-d.

As per data maintained with SteelMint, total iron ore exports from Indian ports for the week (31 Oct-6 Nov) were recorded at 54,900 t as against 138,600 last week.

Rationale:

• Price indicators: No confirmed deal was reported in the current publishing window and hence given 0% weightage under T1 trade.
  
  
• SteelMint received eight (8) indicative prices and offers during the current publishing window, and six (6) were considered for price calculation as T2 inputs, given weightage of 100%.
  
  

Market highlights:

• Iron ore stocks rise at Chinese ports: Iron ore inventory at major Chinese ports increased to 145.1 mn t last week as against 142.3 mn t the week before, as per data maintained by SteelHome.
  
  
  
• Freight rates drop: Freight rates for 50,000-55,000 t export vessels from India's east coast (Paradip) to China have dropped by $1/t to $19/t this week.