Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have fallen by $4.30/mt week on week to $76.50 /mt CFR China amid a slump in the futures market and the softening of finished steel prices, traders said on Friday, April 7.
“Indian export offers lost $5.50/mt on the last day of the week wiping off all signs of a tentative mid-week recovery. There is a lot of nervousness and negative sentiment in the market,” an Odisha-based trader said. “There is a lot of market talk after the big loss in a single day that $70/mt could be the next bottom,” the trader added.
Sources said that the combination of weakness in the futures market and the softness of finished steel prices is expected to gather momentum to push offers to the next bottom of around $70/mt mark.
At least two traders said that fears of fresh payment defaults are plaguing the market. They said that, though not yet officially confirmed, there had been problems regarding payments when offers were at around $80/mt and such problems may surface again if the current free-fall continues.
However, some market players state that it is difficult to predict the short-term trend and that the market may have moved down too fast. But at the same time these sources added that the sharp slide in Chinese billet prices indicates that Chinese steel mills will not be restocking in a hurry and so the possibility of a recovery of local offers from current levels will be very limited at best.