Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have beached the $80/mt mark, gaining $6/mt during the past week to around $81/mt CFR China amid volatile market conditions, traders said on Friday, November 25.
“The volatility in the the market has created nervousness. Sustainability is still not clear. Offer levels slumped to a week low of $72/mt with the market expecting a correction, but instead offers bounced back to over the $80/mt mark,” an Odisha-based miner-exporter said. “While the outlook for the physical market driven by strong positions in futures looks positive, the high volatility is a concern for entirely physical markets like India,” he stated.
At least two traders pointed out that the volatility in offers is proving to be a challenge in committing transaction volumes by traders as the latter are also having to face issues of meeting logistical cash expenses at a time of acute cash liquidity in the market in the wake of the demonetization of high value Indian currency notes.
Some market sources said that, while the upside potential from current levels is expected to continue on the back of the strengthening of finished steel prices and speculative futures positions, a mid-term correction of around $5/mt triggered by unwinding of some large plus positions in futures cannot be ruled out.