Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have softened by $1/mt week on week to the range of $50-51/mt CFR China amid low market activity as buyers chose to wait and observe the market trend, traders said on Friday, June 17.
“Gains to higher than the $53/mt level faileded to be sustained during the past week. Most buyers pulled out anticipating offers would dip below the $50/mt mark,” an Odisha-based miner-exporter said.
“Despite sporadic gains in offers, pessimism has persisted in the market as higher levels have failed to be sustained even in the short term over the past few months,” the miner-export said.
“In the Indian market too there is an oversupply of iron ore fines since most miners have increased production and built up stocks ahead of the monsoon rainy season when most mines will be forced to reduce production,” he added.
A section of the market said that there have been several reports of Chinese steel mills re-selling iron ore cargoes and so traders representing them have been cautious about concluding any fresh transactions.
At the same time, two local traders cautioned that, while possibilities of a sub-$50/mt mark might trigger buying interest, local aggregating traders would find it difficult to conclude large-volume transactions as spreading monsoon rains would cause major transportation and logistics difficulties.