Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have edged down by $1.60/mt during the past week to $63.20/mt CFR China as bearish sentiment has spread across the market resulting from underlying jitters over trade tensions and uncertainties over finished steel prices, traders said on Friday, April 6.
“The mood in the raw material market is pretty grim as participants are wary of a full-blown trade war now that both the US and China are in a retaliatory mood as regards tariff imposition,” an Odisha-based miner-exporter said.
“Few are certain of the direction of US-China trade skirmishes and whether it will snowball into a trade war. Our buyers tell us that, even discounting a worst-case scenario, current trade trends will lead to sharp shifts in demand and supplies in the steel market, and possibilities of a glut in select geographies would put pressure on finished steel prices in the medium term and hence the cautious outlook on raw material off-take,” the Odisha-based miner-exporter added.
According to two other traders, the fall in offer levels will be slow but steady from current levels as transaction volumes have been negligible during the past week as reports received in India from traders representing Chinese steel mills indicate that the latter are keen to operate with the lowest-possible raw material inventories.
The holiday in China also kept several traders representing Chinese steel mills away from the Indian market, contributing to the low trading activity, they added.