Indian export offers for high grade
iron ore fines (with Fe content of 63.5 percent and higher) have moved up by almost $4/mt to around $87.80/mt CFR China during the past week as the local market has been caught by surprise by the size of the surge based on speculative purchases in the futures markets, traders said on Friday, February 10.
"The market has been caught completely by surprise by the high volatility and surge in offers. I am not sure how many traders have been able to conclude transactions despite the surge," an Odisha-based miner-exporter said.
"Of course, business activity in the market is expected to improve but the size of the surge was unexpected. I am not sure of its sustainability as the surge is completely led by speculative positions in the futures market," the miner-exporter added.
At least two other traders said that the week has been marked by high volatility and on several days offers moved in both directions by margins higher than $2/mt, but every rise resulted in a fall in transaction volumes, indicating that buyers preferred to stay out of the market and wait for a decline.
"While several traders are talking of $90/mt as the next target, the market is moving up too fast hinged on futures rather than due to the fundamentals of raw material stocks and finished steel prices, and hence the sustainability of prices is in doubt," one trader said.