Indian export offers for high grade iron ore fines (with Fe content 63.5 percent and higher) have edged down marginally during the past week by $0.70/mt to $74.80/mt CFR China amid volatile market conditions and the absence of any definite short-term trend, traders said on Friday, November 16.
Sources said that offers on the last day of the week, however, have recovered some of their mid-week losses from a low of $74.30/mt, but added that further gains are uncertain and hence buyers prefer offers to settle before making fresh deals, leading to a fall in transaction volumes during the past week.
Furthermore, a slight increase in stocks at Chinese ports is also expected to keep restocking at low levels and to limit the upside potential of offers from current levels, the sources added.
“Buyers are wary of making deals at higher levels as Chinese steel mills are not expected to restock aggressively with the winter months setting in. Indian offers tend to move in either direction and most local aggregating traders prefer to stay on the sidelines to avoid volatility and await for market conditions to settle down,” an Odisha-based miner-exporter said.
“Part of the volatility is attributed to apprehensions of supply disruptions from global supply majors. At the same time, at the local level, mines in Odisha are reportedly stepping up production in view of the slight revival of buying interest in high alumina-content Indian iron ore fines. But then again, buyers are seen to be retreating at every rise in offer levels, leading to mixed market conditions,” the miner-exporter added.
However, a commodity analyst with a Mumbai-based financial advisory firm said that offer levels will continue to face limits on their upside potential as buying interest in high alumina-content Indian fines will be short-lived only until such time as supply disruptions from global suppliers persist.