Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have overcome mid-week dips and moved upwards approaching the end of this week, increasing by around $3.50/mt week on week to $79.60/mt CFR China, as buyers have stepped up transactions anticipating that no downward correction is imminent in the short term, traders said on Friday, August 18.
“The upward momentum appeared to have eased off mid-week. However, after a momentary dip, offers rebounded on the back of strong buying sentiment,” an Odisha-based miner exporter said.
“Traders representing Chinese steel mills have become active in concluding transactions for large volumes, perceiving that there is minimum downside risk, and with the strong performance in the futures market resulting in offers gaining close to $5/mt in just two days,” the exporter added.
At least two other traders said that the market is now expectantly looking at the $80/mt mark to be breached.
Sources said that Indian market expectations of strong buying to continue is also based on the fresh sanctions on North Korea and hope that their impact will cause Chinese buying of ore from North Korea to shift to the Indian market. However, the two traders were quick to add that any certainty about such a shift in buying was premature.
According to market sources, the further tightening of supplies in the Indian market is expected to provide support for Indian export offers. The sources said that there has been a significant drawdown of stocks held by aggregating traders and that they will have to wait to source fresh stocks until towards the end of the current month or early next month when operating mines step up production after the monsoon rains have abated.