Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have breached bottom support level of $60/mt during the past week, losing $4/mt to the range of around $59-60/mt CFR China, as buyers pulled back from the market even though exporters continued to lower their offers, traders said on Wednesday, March 11.
According to an Orissa-based miner-exporter, the market is in a vicious downward spiral. Offers have been reduced during the past week, but buyers have refused to conclude any transactions, anticipating further losses now that the $60/mt mark had been breached.
The miner-exporter also said that, far from Chinese steel mills restocking, there have been worrying reports in the market that a few steel mills were in fact selling off their long-term contracted cargoes, and this has had a depressing impact on local sentiments.
"In any case, Indian iron ore volumes for exports have been falling steadily, with neither miners nor traders finding the current price levels viable when the 30 percent export tax is taken into account," the miner-exporter added.
According to another Orissa-based trader, market sentiments have taken a beating particularly for those with exportable volumes of low grade iron ore fines (with Fe content of 58 percent and lower) as there are no buyers for such grades and reportedly as much as 12-15 million metric tons of low grade iron ores are lying idle at ports across eastern India, with traders suffering severe cash flow problems.