The recovery of Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) has gained momentum during the past week, moving up by $3-4/mt to $63-64/mt CFR China amid higher transaction volumes, traders said on Friday, June 5.
"There has been a distinct improvement in sentiments and transaction volumes. Traders have been veering round to conclude larger transactions amid greater optimism due to the recovery becoming more sustainable," an Orissa-based miner-exporter said.
"Reports reaching India have indicated that, with stocks falling at Chinese ports, traders representing Chinese mills have been concluding large transactions," the miner-exporter said.
"But the buying momentum will have to last through the medium term to provide support for current offer levels and prevent them from falling below the $60/mt mark," he added.
However, a section of the market has advocated caution, indicating that higher offers in the physical market were being driven by positions in the futures market.
Some market sources pointed out that the fall in port stocks in China has not been as sharp as initially expected to prompt large-scale aggressive restocking by steel mills and so the upside potential will continue to be face risks.
Not ruling out a correction, the sources said that several buyers are seeking stability in the market and withdrew after receiving offers indicating the continued nervousness.