Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) are currently at $99-100/mt CFR China, having slid as low as $98-99/mt CFR China in recent days amid a lack of any buying support, traders said.
"After much bearish anticipation over past month, export offers finally fell below the $100/mt mark as traders representing Chinese steel mills have stayed away from the market and even lower levels did not interest them," an Orissa-based miner-exporter said.
"Reports indicate that Chinese mills have not been interested in restocking and have preferred to operate based on current iron ore inventories," he said.
"It is a distinct possibility that, with the negative outlook and global oversupply, local offers could continue to slide to $95/mt in the short term," he added.
Market sources said that the global iron ore market could receive some support as India would have to increase its dependency on imported ore in the medium term but this would not be sufficient to reverse the fundamentally bearish trend in the market.
India's Supreme Court on May 16 ruled that around 26 iron ore mines in eastern Indian province of Orissa would have to temporarily shut down since they had been operating with illegally extended mining leases.
Sources estimated that the closure of mines will reduce domestic supplies by about 40-million mt per year. Large steel plants Tata Steel and Steel Authority of India Limited (SAIL) with captive mines in Orissa will have to resort to imports to meet their raw material requirements.
The court order will force the shutdown of six iron ore mines of Tata Steel and two belonging to SAIL. Orissa produced 70 million mt of ore during 2013-14 from 56 operational mines.
However, sources said that Chinese mills have reduced their buying so sharply that India's entry as a buyer will have a minimal impact on iron ore offers.