Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have bounced back above the $60/mt mark, increasing by $2/mt during the past week to $62/mt CFR China, but market sentiment has remained gloomy as local traders attributed the gains to volatility in futures rather than fresh bookings, traders said on Friday, November 10.
“The gains of the week have not improved market sentiment as doubts have persisted over the sustainability of current levels in the absence of fundamental support from key drivers,” an Odisha-based miner-exporter said.
“The gains in physical offers are driven by futures volatility. This is indicated by the fact that Chinese steel mills are not restocking and are sourcing most of their requirements from port stocks and maintaining minimum inventories. Hence, in the local market, traders representing Chinese steel mills are receiving offers but not responding,” the miner-exporter added.
Citing reports received from their overseas counterparts, two other Indian traders said that the date for production cutbacks at Chinese steel mills is drawing near in some regions of China and this is expected to undercut the tentative gains in offers.