Indian iron ore fines export offers slump in face of speculative futures selling

Friday, 05 July 2019 18:08:06 (GMT+3)   |   Kolkata
       

Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have come under severe pressure plunging by $5.10/mt week on week to $108.75/mt CFR China in the face of heavy speculative selling in the futures market and buyers in the physical market feeling that prices had moved up too far in too short a time, traders said on Friday, July 5.

“Offers have faced intermittent pressures for a correction with a large number of buyers pulling back from concluding contracts perceiving that offers had risen too far and so they preferred to wait for the market to cool down,” an Odisha-based miner-exporter said.

“The volatility with a downward bias could be gauged from the fact offers lost a hefty $7/mt on the last day of trading for the week. Of course, such large losses could be attributed to heavy selling in the futures markets with speculators trying to book profits at higher levels,” the miner-exporter added.

However, two other traders said that, while a correction and a cooling down of the market is expected after three consecutive week of gains, the bottom of offer levels will not be below the $100/mt mark, given that fundamentals like tight global supplies and low stocks in the local market during the current monsoon season will provide support at lower levels.

The two traders said that, with downside risks from current levels being limited, it is only a matter of time before buyers start making fresh bookings at lower levels and, with speculators easing off, offers have the potential to move up in the medium term.


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