India export offers for high grade iron ore fines with 63.5 percent and higher iron content was hit by high degree of volatility losing $1-2/mt in the past week to the range of $126-127/mt CFR China, after falling to a weekly low of $123/mt, traders said on Monday, January 27.
"The local iron ore export market is in complete turmoil and high volatility in offers has forced both buyers and traders to pull out, resulting in prices continuing to weaken amid very low transaction volumes," two Orissa based miner-exporters said.
They state that a combination of bearish trends are affecting the market like fears of softening of steel prices in China, over production in Australian mines and production volumes poised to increase with mines in Indian provinces of Goa and Karnataka as more mines get back into production.
Indian export offers have recorded gains only two days since beginning of 2014, indicating complete lack of support for the raw material from international buyers, the miner-exporters said.
Market sources have said that the marginal recovery from $123/mt to the current range of $126-127/mt is unlikely to sustain, considering that Chinese steel mills are not expected to commence re-stocking and traders representing these mills would not be booking against Indian offers with the Chinese New Year ahead.
Chinese traders are also facing liquidity crunch of bank financing forcing them to reduce their commitments, the sources said.
The combined impact of these may result in Indian offers to further soften by $3-4/mt in the short-term, the sources added.