Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and above) have increased by $3-4/mt during the past week to the range of $59-60/mt CFR China, but doubts have persisted over sustainability of the gains unless steel prices firm up or over-production is checked, traders said on Friday, September 11.
“The upward movement of Indian offers during the week was largely owing to gains in futures and swaps,” said an Orissa-based miner-exporter.
“Transaction volumes were up at every upward movement but sentiments have continued to be nervous,” he said.
“The market is not being driven by fundamentals. Higher levels above the $60/mt mark are unlikely to hold as steel prices continue to be weak in a market characterized by oversupply which may prevent steel mills from any aggressive restocking of raw materials,” he added.
A section of the market maintains that current offers risk a downside correction of $1-2/mt in the short term, amid oversupply in the market with mines in Orissa and Goa coming back into production and increases in inventories held by miner-exporters.