Following a brief correction, Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have surged back on an uptrend, gaining $9.30/mt week on week to $105.55/mt CFR China amid tightening supplies and gains in raw material and finished steel futures contracts, traders said on Friday, June 14.
“The indication of bullish sentiment returning in the market has been evident from the fact that offers gained a massive $7/mt in the course of just two trading days. The short correction in offer levels seen earlier triggered by the unwinding of speculative futures gave way to hectic restocking as perceptions grew that tight raw material supplies are here to stay despite sporadic corrections and weak futures,” an Odisha-based miner-exporter said.
“Also, with the monsoon rains scheduled to spread across the country by the end of June, most miners and aggregating traders are focusing on restocking material at port stockyards in anticipation that rainfall will lower stocks available during the rainy season ahead,” the miner-exporter added.
According to two other traders, now that the market has broken out of a correction phase within a very short term having bottomed out at levels of around $96/mt, the sustained high volume trades seen during the past week will ensure a significant upside potential and a distinct possibility of offers touching the $110/mt mark in the short term.
The possibility of lower stocks available during the forthcoming monsoon season as miners will be forced to lower capacity utilization will also provide support for the rising market, the two traders averred.