Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have continued to edge down, losing $1.40/mt during the past week to $65/mt CFR China, in reaction to the weakening of futures trades and the absence of buyers, traders said on Friday, April 27.
“The impact of the weakening of the futures market has had a greater impact on physical trades as volumes have fallen sharply with traders representing Chinese steel mills largely absent owing to the extended weekend holiday ahead,” an Odisha-based miner exporter said.
“Though few in the market officially acknowledge it, there are reports that a section of aggregating traders are even offering discounts to conclude transactions. This has not been seen in the Indian market for a long time and is an indication of nervous sentiment among market participants,” the miner-exporter added.
At least two other traders said that, apart from the holiday ahead, buyers are also scarce as they are waiting for prices to find a new bottom, before concluding fresh transactions.
Reports received from their buyers have also indicated that Chinese steel mills are unwilling to restock and are sourcing most of their raw material requirements from adequate port stocks, the two traders averred.
Sources said that, with current offers levels still having a downside risk of at least $2/mt in the short term, buyers will wait for the market to settle at lower levels before concluding fresh deals.