Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have softened by $1/mt during the past week to the range of around $59-60/mt CFR China following increases in the previous period, as increased offer prices were rejected by buyers, traders said on Saturday, May 16.
"The markets might have moved up too fast, too soon. The current levels of the physical market are being driven by positions in the futures markets," an Orissa based miner-exporter said.
"Reports indicate that stocks at Chinese ports have indeed fallen but not to the extent of triggering large-scale restocking, and so higher Indian offers have been resisted by traders representing Chinese steel mills," the miner-exporter added.
Market sources said that a number of traders reported that buyers accepted offer price levels but did not respond to conclude transactions as some of them maintained that the higher levels would not be sustained and that it would be better to defer transactions.
Some traders felt that a deeper correction was expected by the market as soon as over-bought positions in the futures markets started to unwind and indications of this have been evident since levels of $60/mt and above have not been finding any takers.
The sources said that current offer prices are also expected to come under fresh pressure within the next few weeks as monsoon rains hit iron ore mining provinces, impacting production and availability of exports from miner-exporters.