Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have gained $2/mt during the past week to levels of $56-57/mt CFR China but the rally has shown signs of petering out as offers retreated from the weekly high of $59/mt, traders said on Friday, July 15.
“Local export offers were being driven largely by the futures market but the fundamentals remained bearish and so the upside movement remained restricted,” an Odisha-based miner-exporter said.
“There was a lot of high volume buying activity at higher levels. But with steel prices remaining weak, I feel buyers’ appetite has been sated, resulting in peak offers of the week falling off,” the miner-exporter said.
“The rally was a boon for aggregating traders who were able to liquidate ready stocks during the rally. But volatility is not good for miner-exporters,” he added.
However, at least two traders observed that transaction volumes could continue to remain healthy as long as the next expected downside level of $55/mt held firm.
Market sources said that, according to traders representing Chinese steel mills, the latter’s short-term buying interest would depend on trends in stocks at Chinese ports where activity has slowed down towards the close of the week.