Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have rallied during the past week gaining $3/mt to the range of $58-59/mt CFR China, on the back of a marked revival in sentiments and transaction volumes, but the week’s peak level of $60/mt failed to be sustained as forces of correction set in towards the close of the week, traders said on Friday, July 29.
The traders said that volumes booked by traders representing Chinese steel mills have been up significantly during the week as the perception gained ground that short-term downside risks were expected to be limited to $55-56/mt.
“Market activity was robust in terms of the number of transactions and volumes. There was significant upbeat mood emboldening exporters to increase offer levels,” said an Odisha-based miner-exporter.
“But personally I am cautious on not being too sure how much of the upside has been driven by speculative buying in the futures market. The higher level of $60/mt not being sustained and losses on the last day of the week point to the validity of such concerns,” he said.
At least two other traders said that, while the market expected some amount of correction in the week ahead, the downside would be limited to $2-3/mt and would not significantly impact the bullish mood in the market.