Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have edged up by a marginal $0.90/mt during the past week to $84.05/mt CFR China amid high volatility reflecting volatile speculative activity in futures and buyers in the physical market being unsure where the market is heading, traders said on Friday, March 15.
“There are too many ups and downs in the market. Even daily fluctuations in offers have ranged over $1/mt in either direction,” an Odisha-based miner-exporter said.
“Such high volatility has unnerved a lot of participants, both buyers and sellers, in the physical market. Buyers are not sure whether a correction is around the corner and are holding back from deals, while sellers are unsure whether the uptrend is yet to peak and have preferred to wait to conclude contracts after a further increase,” the miner-exporter added.
Market sources said that, in view of the high fluctuations in offer levels, Chinese steel mills have preferred to restock from local port stocks where prices are relatively more stable than overseas physical contracts.
A steel sector analyst with a Mumbai-based financial services advisory firm attributed the rise in futures speculation to the fact that there has been a disruption in raw material supplies since the Vale tailings dam breach but the extent of the disruption and its possible longevity is yet to be clarified. This prompts speculators to alternately sell and buy futures contracts in short-term speculative activity, the analyst added.