Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have moved down by $8.50/mt week on week to $67.80/mt CFR China amid mounting pessimism over restocking by Chinese steel mills, traders said on Friday, September 22.
“The market has been showing signs of weakness over the past few weeks. But fresh reports of the likely imposition of production cuts on Chinese steel mills have dealt a severe blow to sentiment and to the fundamentals of the market,” an Odisha-based miner-exporter said.
“The new measures for Chinese steel mills are still unclear. But any production cut will have a negative impact on export volumes from the Indian market and offers from India have suffered a setback for this reason,” the miner-exporter added.
At least two other traders said that reports received in India indicated an imminent liquidity tightening in the Chinese financial markets and players in the Indian market fear that this would put traders representing Chinese steel mills at a risk and reduce their activity in the India.
The falling finished steel prices in China have also contributed to the significant slowdown in restocking and thus to the reduced export transaction volumes in the Indian market, the traders added.