Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have continued to decline, falling by $1/mt during the past week to the range of $70-71/mt CFR China amid negligible transactions and market perceptions that offers are still to bottom out, traders said on Tuesday, December 2.
"Offer levels have slumped below the $70/mt mark but have recovered for technical reasons. Given the oversupply in global markets and Chinese steel mills' reluctance to restock aggressively, there is very little upside potential for iron ore offers," an Orissa-based miner-exporter said.
"There are still a lot of expectations in the market that offers could fall below $60/mt in the medium term and this has worsened sentiments and buyers are naturally not willing to conclude transactions until prices have consolidated at a bottom level," he said.
"Offers were lowered in the middle of the past week in the hope of pushing volumes, but this plan has failed to have an impact since traders representing Chinese steel mills have refused to conclude any deals," he added.
Market sources said that usually at the end of the year Indian offers are supported by lower production from Chinese mines due to the winter season, but no such trend is evident currently, resulting in continued downward pressures on prices and an extremely negative outlook.