Downward momentum has gathered pace for Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and above), which have lost $6-7/mt during the past week to hit a new bottom of $50/mt with offers now ranging at $50-51/mt CFR China as buyers pulled back anticipating a further fall, traders said on Wednesday, April 1.
"Few in the market have a clue regarding the next bottom of offer levels. Having a hit a new low of $50/mt, most are unsure whether the downward movement has run its course or not," an Orissa-based miner-exporter said.
"Naturally with offers on a continuing tailspin, traders representing Chinese steel mills are reluctant to conclude transactions at current levels," the miner-exporter said.
" Reports received here indicate that several Chinese steel mills are considering output cuts. Due to this factor, coupled with the global softening of steel prices, immediate restocking by Chinese steel mills is being ruled out, further worsening the negative outlook," he added.
Market sources said that, apart from the lack of buyers, exporters, particularly aggregating traders, have deserted the market since the level of $50/mt did not leave them with any margins from transactions.
Even miners holding stocks at pitheads or port stockyards refrained from completing any transactions since most have already incurred freight costs which cannot be recovered at current prices, the sources added.
"Indian outward shipments of iron ore during the fiscal year (2014-15) just ended on March 31 are not expected to exceed the 7 million metric ton mark. This export volume will be at least halved during this fiscal year if offer levels do not rebound above the $60/mt mark, which would be very unlikely," a second Orissa-based miner said.