Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have continued to face resistance falling below the $60/mt mark, edging down by $1/mt during the past week to $59-60/mt CFR China, with buyers staying away amid the uncertain short-term market direction, traders said on Friday, August 12.
“Signs of a correction have started to be seen. Buyers are unwilling to respond to offers. Most are unsure of which way the market is going after the week’s high of $62/mt failed to hold,” an Odisha-based miner-exporter said.
“There is uncertainty over how far the correction will run. There are evident key drivers for the physical market. Indian offers will continue to respond to news from the futures market, which makes pricing difficult for miner-exporters,” he said.
However, market sources said that, without any dramatic downturn in futures prices, local offers could be expected to move within a narrow range, as downside risks will be limited by the restricted volumes on offer in the local market owing to lower mine production during the current rainy season.
They said that in the short term any correction will not exceed $2-3/mt, while upside potential will also be limited, resulting in narrow movements in the market.