Indian export offers for high grade
iron ore fines (with Fe content of 63.5 percent and above) have gained $4/mt during the past week to $58-59/mt CFR China, riding on the back of significant transaction activity and the rush to buy at low prices, traders said on Friday, April 24.
"Traders representing Chinese steel mills are back feeling that the market might have hit the medium-term bottom. Stocks at Chinese ports have also fallen over the past month, leading to restocking," an Orissa-based miner-exporter said.
"The rebound has been strong and sudden. Reports state that a few miners in the eastern region have pulled back their offers since capacity utilizations of mines was reduced over recent months and miners do not have sufficient pithead stocks to meet inquiries," he said.
Market sources said that the biggest gainers in the current market revival are aggregating traders who have significant stocks idling at ports and stockyards.
Although no definitive estimates are available as yet, there is a significant draw-down of the estimated 20 million metric tons of high and low grade ore idling at various
iron ore handling ports along the eastern coast, the sources said.
However, there are sharp differences of opinion in the market on whether the revival in offers will lead to consolidation of offers at higher levels.
Some traders have pointed out that restocking by Chinese steel mills will continue for a while since
iron ore stocks at Chinese ports have fallen by 600,000 to 70,000 tons over the past week, resulting in a rise in off-take from
India.
Some other traders have said that that the upward movement in offers for physical delivery is technical in nature and largely driven by the upswing in the futures market which has touched an over-sold position of contracts during the prolonged slump, sources added.