Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have moved down marginally by $0.30/mt during the past week to $65.70/mt CFR China after moving in both directions for most part of the week with buyers continuing to show a lack of interest in Indian fines, traders said on Friday, June 29.
“Indian fines are not the preferred choice of traders representing Chinese steel mills. We are not sure whether this is an emerging and worrying trend or not but it’s a fact that even the temporary change in preference of buyers is having a negative impact on the Indian market,” an Odisha-based miner-exporter said.
“Buyers’ changed preference is dictating trends. Even lower production and material availability owing to monsoon rains is not able to provide support to offer levels,” the miner-exporter added.
However, according to a commodity analyst with a leading financial services firm headquartered in Mumbai, the twin impact of the depreciating Indian rupee and the Chinese yuan has yet to fully impact the iron ore trade and hence offer levels may continue to fluctuate in either direction in the medium term as seen during the past week.
The market has yet to find an equilibrium between the higher cost of imported raw material in the wake of the depreciation of the Chinese currency and the extent to which Indian iron ore exporters are willing to adjust offers to push volumes after the weaker Indian rupee significantly improved their export margins, the analyst said.