Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have moved up by $2.10/mt during the past week to $84.15/mt CFR China as reports trickled into the market that the disruption of supplies from Vale would be worse than expected, traders said on Friday, March 29.
Indian offers had edged down during the most part of the week touching a mid-week low of $82/mt, but bounced back on reports of lower production from Vale and the impact was further compounded by fears of lower Australian supplies owing to cyclonic weather conditions, the traders added.
“Reports reaching India indicate that Vale supplies will be lower by a range of 50-70 million metric tons during the current calendar year. This is worse than what the market was expecting,” an Odisha-based miner-exporter said.
“The shortfall in global supplies has triggered hope that traders representing Chinese steel mills will show greater interest in high alumina-grade Indian iron ore fines, providing support for local offers. Interest in high alumina-content Indian iron ore fines had surfaced late last year but had been on the wane over the last few months, but the supply shortage is expected to boost revived interest in the local market,” the miner-exporter added.
According to market sources, aggregating traders are not seen to be concluding high-volume transactions and are holding on to existing stocks, anticipating that offers will rise further as new reports of supply disruptions trickle in, with a section of the market speculating that global miner Rio Tinto will also lower sales during the current year.