Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have softened by $2/mt over the past week to the range of around $93-94/mt CFR China as sentiment weakened towards the end of the week with buyers of even small volumes retreating fearing a weakening of steel prices, traders said on Tuesday, August 12.
"The liquidity crunch faced by several Chinese steel mills has been worsened by reports of an overall weakening of steel prices. Nervousness has been preventing steel mills from restocking raw materials," an Orissa-based miner-exporter said.
"Transaction volumes as reported in the market have been insignificant. I submitted offers but pulled back from completing transactions at current levels," he added.
Market sources said that, according to reports, several Chinese steel mills, which were earlier considering starting restocking, pulled back during the week, anticipating a softening of steel prices and worsening of cash flow positions.
The sources said that at the same time in Indian markets several traders have also been finding it difficult to aggregate volumes from mines in the face of monsoon rains.
Transportation costs too have increased owing to adverse weather conditions and hence traders have been reluctant to conclude transactions at current offers, the sources said.