Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and above) have continued their downtrend during the past week, falling by $3/mt to $84-85/mt CFR China, but transaction volumes have been slightly higher during the week, traders said on Tuesday, September 9.
"The iron ore export outlook and market sentiments have remained negative and weak. However, there has been some improvement in transaction volumes from buyers perceiving that prices having fallen sharply will have a limited downside," an Orissa-based miner-exporter said.
"But the market has been cautious over uncertainty whether offers will move towards the $80/mt mark. Additionally, exporters have been cautious about purchasing large volumes since current price levels offer negligible margins," he said.
"Only those traders and miners keen to maintain a market presence overseas have been concluding transactions," he added.
However, some market sources have warned that the improvement in volumes at low price levels is unlikely to be sustained since global steel prices are seen to be softening and as Chinese steel mills are expected to continue to operate with very low levels of raw material inventories due to liquidity issues.
The sources said that Chinese long product prices continue to edge down and there is nervousness in their domestic market and, under such conditions, traders representing the steel mills are unlikely to conclude large iron ore bookings until prices stabilize.