Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and above) hit a new low of $48-49/mt CFR China during the past week but have staged a modest recovery towards the end of the week, rising to the range of $50-51/mt, triggering higher activity among exporters to push stockpiles, traders said on Thursday, April 9.
"Offer levels moved down too rapidly below the $50/mt mark. A correction was on the cards, but is not expected to be sustained as fundamentals continued to be negative," an Orissa-based trader said.
"However, the sustained fall for nine days has brought buyers back into the Indian market and local traders have been keen to take advantage of the return of buyers to push stocks piled up at port stockyards," he said.
"Even a $1-2/mt uptick was sufficient to prompt traders to conclude transactions for small volumes even at nominal margins to liquidate stocks," he added.
Market sources said that the rebound in offer levels towards the end of the week was too nominal and the higher physical trade was just a reflection of oversold futures market conditions.
Another Orissa-based trader said that Indian offers are expected to move sideways in the immediate short term before coming under renewed pressure to seek another bottom. He argued that local traders and aggregators are unlikely to conclude transactions at the current low levels, while most traders representing Chinese steel mills are seeking only small unviable volumes to test prices rather than cater to any significant restocking by the steel mills.