Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have staged a mild recovery in the New Year gaining $1-2/mt to around $71-72/mt CFR China but have failed to trigger any revival in transaction volumes, traders said on Wednesday, January 7.
"Indian exports of iron ore have almost come to a halt. It will need much stronger support than marginal gains in offers for purely technical reasons to have any positive impact on transaction volumes," an Orissa-based trader said.
"The marginal gains in offers were more a reflection of the global futures market. No physical transactions were reported in the local market in the New Year, as most traders had stopped aggregating volumes and offer levels were too low to ensure any margin for miner-exporters," the trader said.
Market sources said that Indian iron ore exports face a bleak outlook, citing the fact data showed that during 2014 the country had turned into a net importer of iron ore. Government data showed that Indian exports of iron ore in 2014 were estimated at seven million metric tons, while imports were pegged at eight million metric tons.
Sources said that the only way to revive export volumes in the current global downtrend was for the Indian government to take corrective measures by sharply reducing the 30 percent export tax to partially neutralize low offer levels.
Without government action and with Chinese steel mills not showing much sign of restocking raw materials, export volumes will continue to be negligible and offer prices will be merely indicative with no follow-up bids, the sources added.