Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have remained under pressure, dropping by $4-5/mt during the past week to the range of $120-121/mt CFR China, while even lower offers have failed to attract buyers and transactions volumes are still at negligible levels, traders said on Wednesday, February 12.
According to an Orissa-based miner-exporter, the negative outlook for iron ore fines exports has worsened during the past week owing to a combination of local and global issues.The local market is currently in a bearish cycle, with export offers being steadily lowered, though traders representing Chinese mills are refusing to conclude transactions in the expectation that the downward price movement will continue. Furthermore, the traders in question are not under any compulsion to make bookings since Chinese mills are not inclined to restock aggressively, the miner-exporter said.
At the same time, iron ore miners in the state of Orissa are facing extremely uncertain times since an investigating commission of the Indian government has indicted the mining industry in the eastern Indian state of widespread illegal mining and there are currently uncertainties over the action that the government might initiate in response to the report of the commission, the miner said.
Steadily falling prices, a lack of buyers, the reluctance of miners to conclude transactions at low prices and the possibility of punitive action have all contributed to virtually crippling the local markets, the miner added.
However, some traders state that stockpiles at Chinese steel mills have fallen sharply over the past month and a half and that offers below $120/mt could attract fresh interest from buyers, providing much needed support for the market.