Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) generally moved sideways during the past week before softening at the end of the week to around $58-59/mt CFR China, as buyers preferred to remain on the sidelines until prices hit the next bottom, traders said on Wednesday, March 18.
According to an Orissa-based miner-exporter, market sentiments have remained weak and, given the negative medium-term outlook, most buyers are waiting for the downward movement to hit the next bottom before concluding any new transactions.
The trader also said that, having breached the support level of $60/mt, buyers are waiting for offer levels to consolidate at the next lower level. There is a lot of talk in the market of prices moving to a low of $55/mt before buyers return to the market.
Sources said that steel prices have showed signs of revival during the past week, but gains have been very tentative and the market has lacked confidence for an upward trend, and so no raw material restocking by Chinese steel mills has been triggered.
At the same time, local traders and miner-exporters in India are not keen to push volumes as the sustained fall in offers has failed to ensure any significant margins in export shipments. In fact, for miner-exporters with higher fixed costs of operations, current prices would actually translate to negative margins, the sources added.