Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have edged down by around $4/mt during the past week to $76.30/mt CFR China, giving a clear indication that higher levels are being resisted by buyers and that previous highs of around $80/mt are unlikely to be breached in the absence of sustained support, traders said on Friday, January 6.
“While volatility in the market has eased, offer levels have edged down. Speculative trades can only have a limited impact on pushing up prices. Key drivers remain weak and so offer levels have not been sustained in the physical market,” an Odisha-based miner-exporter said.
“Several buyers told us that appetite of Chinese steel mills for restocking is waning and this is reflected in much lower transaction volumes,” the miner-exporter stated.
Market sources maintained that, despite higher levels not being sustained, no definite short-term trend is clear as offers have fluctuated in both directions during the week - two days of losses followed by marginal gains the next day.
At least two traders said that restocking by Chinese steel mills might well have come to an end for now as the mills are unlikely to make large purchases due to the Chinese New Year holiday later this month and this would put fresh pressure on Indian export offers.