Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have continued to weaken, declining by $3/mt over the past week to the range of $89-90/mt CFR China, with buyers staying away amid a lack of any positive sentiments in the market, traders said on Tuesday, June 17.
"After a sustained softening over weeks, it is very difficult to say if offer prices have bottomed out. There are no positives to support prices or trigger a recover either," an Orissa-based miner-exporter said.
"Ordinarily with offers having fallen below the $90/mt mark, there is little room for a more drastic fall. But a recovery does not seem on the cards either since buyers are in no mood to conclude fresh transactions," he said.
"Several Chinese steel mills and traders representing them are facing a crisis of tight liquidity, which prevents them from making large transactions. Hence, no significant transaction volumes have been reported in the market during the week,' he added.
Sources said that local markets have been rife with speculation that offers may fall to the level of $80/mt and such sentiments have prevented several traders and miner-exporters from desisting from making offers in the first place.
The sources said that miners and traders have been caught in a double bind with falling international prices, while the Indian steel ministry on Monday once again opposed moves to cut the 30 percent export tax on iron ore.
With prices below $90/mt and a 30 percent tax on exports, overseas shipments have become economically unviable, forcing many miners to pull out of the international market, the sources added.