Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have started showing signs of losing momentum, edging down by $1/mt during the past week to $79/mt CFR due to the reports of Chinese steel mills’ rising iron ore inventories as well as the expectations of a break in sustained rise seen earlier, traders said on Friday, September 8.
“After the recent surge in offer levels and high volume transactions, Indian iron ore export market seems to be tired and taking a pause,” an Odisha-based miner-exporter said.
“Reports from our buyers indicate that there has been a sharp rise in Chinese steel mills’ iron ore inventories following the heavy restocking over the past month, and they are reducing their fresh bookings, in return leading to a slight price correction in the market,” the miner-exporter said.
“But considering that finished steel prices are holding out, I presume that Chinese mills will need to start restocking after a brief break,” the Odisha-based miner-exporter added.
However, two other traders expressing a contrarian view said that pressures on domestic iron ore offers may mount in the coming weeks as iron ore production of Odisha-based mines starts to accelerate as monsoon season starts to retreat and more iron ore volumes will be available with aggregating traders resulting in higher supply side pressures.
These traders added that in a noticeable shift in trend, almost all iron ore transactions over the past few weeks have been confined to high grade fines and there were no buyers for lower grade fines. In fact, they estimated that around 140 million mt of low grade iron ore fines have been stock-piled in the absence of buyers.