Indian export offers for high grade
iron ore fines (with Fe content of 63.5 percent and higher) have continued to increase, moving up by $1-2/mt during the past week to the range of $61-62/mt CFR China, but transaction volumes have been limited amid buyers' resistance to higher levels, traders said on Friday, May 29.
"The market is unsure of the short-term direction. Both buyers and sellers are nervous as offer levels have the potential to move in either direction and hence transactions are being postponed," an Orissa-based miner-exporter said.
"The over-bought situation in the futures market is driving international seaborne prices. Indian offers are also moving up but transaction volumes are not moving in tandem," the miner-exporter said.
"Traders representing Chinese steel mills are only concluding transactions for small tonnages. Most are anticipating a correction as soon as over-bought positions in the futures market start to unwind. In the absence of strong restocking by Chinese steel mills, the fundamentals in the market will continue to remain weak and the upward trend will not be sustainable," he added.
Market sources said that current offers have limited upside potential, with levels above the $60/mt mark unlikely to be sustained, while restocking by Chinese mills is very tentative.
At best, offers will move sideways driven by speculative positions in the futures trade, or fall by $4-5/mt in the short term without an increase in transaction volumes, the sources added.