In the past week, Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) sunk to the $40/mt mark and then staged a mild recovery, settling at the range of $40-41/mt CFR China, declining by $1/mt over the past week as pessimism persists among buyers, traders said on Friday, January 15.
"Traders representing Chinese steel mills have received offers during the past week but have not responded. The mild correction towards the end of the week was too weak to provide any sustainable support for Indian offers," an Odisha-based miner-exporter said.
"A few of these traders said that Chinese steel mills are facing falling sales and reduced cash flow. Hence, they are taking measures to limit raw material inventories and so fewer transactions have been reported in India," the miner-exporter said.
"Reports received from our buyers indicate that Chinese port stocks have also inched up to levels of about 98 million mt during the past week and so Chinese steel mills are not in any rush to restock either and, accordingly, the higher Indian offer levels have not been sustained," he added.
Market sources said that no miner-exporter has been able to conclude any transaction over the past week and only transactions for minor volumes have been reported, only by a few aggregating traders in the Goa region.
According to an Odisha-based trader, Indian offers may edge up marginally in response to modest gains in the futures market, but may finally settle below the $40/mt mark as key drivers like physical stocks and raw material consumption rates are bearish.