Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and above) have remained range-bound during the past week at $93-94/mt CFR China amid negligible transaction volumes as buyers have remained on the sidelines, traders said on Tuesday, August 19.
Offers have continued to be under pressure from the twin bearish pressures of the softening of steel prices and the liquidity crunch affecting several iron ore buyers in China, two Orissa-based miner-exporters told SteelOrbis.
"Several local traders and miners said that traders representing Chinese steel mills sought offers during the week but have retreated from the market after failing to provide letters of credit," one miner-exporter said.
"Reports reaching India indicate that many buyers are facing problems in arranging credit from banks and are forced to refrain from concluding transactions, resulting in negligible volumes in the market," he added.
Sources said that local traders and miners are reluctant to lower offers despite the lack of transactions since production costs at pitheads have gone up owing to the rainy season.
With most Chinese steel mills relying on iron ore stocks at ports and operating at very low raw material inventories, the downward pressure on Indian offers is expected to continue in the short term, the sources added.