Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have moved within a narrow range, inching up by a marginal $0.80/mt week on week to around $58.70/mt CFR China amid a pessimistic outlook as restocking by Chinese steel mills has been far below market expectations, traders said on Friday, October 21.
"Indian iron ore export offers have inched up but sentiment is negative, largely because restocking volumes by Chinese steel mills ever since the holiday in China ended have fallen far short of market expectations," an Odisha-based miner-exporter said.
"Offers can move either way from current levels. The modest buying support is too weak to sustain the weak upward movement," the miner-exporter added.
Market sources said that, apart from the demand side, short-term trends will be determined also by the supply side.
While international mining majors like Rio Tinto have issued lower shipment guidance for the rest of the year, the rising surplus in the Indian market will continue to put pressure on Indian export offers.
The sources cited reports that more mines in the western state of Goa will resume production over the next month and the annual production cap of 20 million mt will be reached well before March 31, 2017. At the same time, the eastern Indian state of Odisha is expected to record production of 100 million mt in the same period.