Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have recovered overall during the past week, moving up by $4/mt week on week to $80/mt CFR China, despite mixed short-term trends and uncertainty over whether a sustainable rising trend of prices will be seen, traders said on Friday, January 13.
“Short-term trends in offer levels continue to be diverse. In the past week, four consecutive days of upward movement were followed by three days of decreases. I am not too sure whether a sustainable rally is around the corner,” an Odisha-based miner-exporter said.
“Every rise in offer levels is being matched by a fall in transaction volumes, reflecting buyers’ pessimism regarding the sustainability of higher levels. Local aggregating traders are able to benefit from short-terms spurts in offer prices but not miner-exporters,” the miner-exporter added.
“There is a lot of talk of raw material prices getting support from cuts in production levels by Chinese steel mills. But such talk has been around in the market for quite some time now and I do not feel that it is a sustainable support for current iron ore offers,” he stated.
Two other traders said that reports indicate that Chinese port stocks are at their highest levels in recent years and the rise in iron ore offers against such a backdrop is more confusing.
They have also pointed out that, rather than the fundamentals of the physical market, sharp spikes in Chinese bar and billet prices are triggering fresh speculative interest in the iron ore markets.