Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and above) have slumped by $3/mt in a single day to $113-114/mt CFR China, having remained flat through most of the past week, traders said on Tuesday, April 22.
According to two Orissa-based miner-exporters, traders representing Chinese steel mills had been absent from the local markets for most of the past week and offers had remained stable in the range of $116-117/mt against a backdrop of hardly any transaction volumes.
However, reports received in India indicate that several Chinese steel mills and raw material traders are facing credit clampdowns by financial institutions, and this has resulted in renewed nervousness in the market, triggering offers to slump by $3/mt in a single day, the miner exporters said. Even the lower offers have failed to evoke any buying interest as local traders believe that Chinese steel mills are focusing on drawing on iron ore at port stockyards rather than on concluding fresh bookings, the miner-exporters added.
Market sources said that downward pressures on local iron ore offers will continue from lack of buying support in the short term and rising oversupply in the medium term with the resumption of mining operations in the western Indian state of Goa.
On Monday, April 21, the Indian Supreme Court gave the green light for the resumption of mining in Goa subject to an annual production cap of 20 million mt, after an 18-month ban imposed in September 2012. Goa had produced around 40-50 million mt per year before the mining ban was imposed.
The government of Goa said that iron ore mining would take another three to six months to resume since infrastructure and transportation systems had fallen into disuse since the mining ban was imposed.
Some miners operating in Goa said that production during the current fiscal year was not expected to exceed the 10 million mt mark.