Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and above) have showed a marked revival in prices and transaction volumes during the past week, gaining $3-4/mt to around $53-54/mt CFR China, traders said on Wednesday, April 15.
"Offer levels had moved down too rapidly to touch a new bottom of $48-49/mt. The new low triggered buying interest as traders representing Chinese steel mills felt short-term trends might have bottomed out," said an Orissa-based miner-exporter.
"Reports of the sharp decline in iron ore stocks at Chinese ports have also revived sentiment," he said.
"Transaction volumes would have been higher but several local aggregators or traders withdrew their offers towards the end of the week, anticipating that the price revival would gain momentum," he added.
However, a section of the market has warned against "irrational optimism" since the fundamental negatives in the market have persisted, pointing out the weakening futures market even as the physical market remained strong as an indication of the negative medium-term outlook.
According to an Orissa-based trader, transaction volumes are mostly limited due to iron ore stocks piled up at port stockyards and traders are quick to liquidate such stocks to improve cash flows.
In contrast, shipments from pitheads have remained low since even current offers of $54/mt do not offer sufficient margins to cover logistics and infrastructure costs, the trader added.