Overcoming intermittent resistance from buyers, Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have breached the $70/mt mark during the past week, increasing by $5.60/mt week on week to $73.50/mt CFR China, supported by strong restocking by Chinese steel mills and gains in finished steel prices, traders said on Friday, August 4.
“For a few days in the week, it seemed that the $70/mt mark would not be breached since buyers were seen to be retreating at every rise in offers. But the sustained positive influence of key drivers during the week and the strong performance of Chinese finished steel prices provided bullish support for Indian export offers,” an Odisha-based miner-exporter said.
“There is a lot of optimism that Chinese finished steel prices will maintain their upward trend and so, even though traders representing Chinese steel mills retreated early in the week, they have since been back to conclude transactions for large volumes,” the miner-exporter added.
At least two other traders commented that the market expects some intermittent corrections in offer levels but at the same time the upside potential is expected to be limited at around $75/mt in the short term.
However, if the current benchmark of Chinese billet prices continues to surpass its recent peaks, Chinese steel mills may step up their raw material restocking and give further support to Indian iron ore export offers, the traders added.