Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have staged a sharp recovery during the past week, increasing by $4.2/mt to $70/mt CFR China, riding on the strengthening of futures contract prices and stronger finished steel prices triggering the restocking of higher volumes, traders said on Friday, December 14.
“Offers touching the $70/mt mark and the price rally has caught the market by surprise. Trading volumes during the past week have steadily moved up as traders representing Chinese steel mills increased their transaction volumes in the course of the week,” an Odisha-based miner-exporter said.
“But the rise might be too fast and a correction cannot be ruled out next week, all the more so since restocking by Chinese steel mills could see a tapering off with winter steel production cuts coming into effect,” the miner-exporter added.
According to market sources, the rally in the market also saw a revival of interest in high alumina-content Indian fines, largely a fallout of the recent recovery in prices of iron ore pellets.
However, the sources pointed out that the $3/mt surge on the last day of the week should trigger caution in the market next week and a possibility of a correction in offer levels unless the recovery in finished steel prices is consolidated at higher levels, providing fundamental support for the raw material market.