As downward pricing pressures increased during the past week, Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have decreased by $2.30/mt week on week to $64.30/mt CFR China, with mid-week gains not being sustained as buyers lack confidence in the market, traders said on Friday, May 25.
“Every upside is facing resistance from buyers who are reluctant to conclude deals in a rising market, indicating the lack of confidence in the market,” an Odisha-based miner-exporter said.
“The mid-week high of $66.80/mt fell back the very next trading day and the market was not finding any firm direction, prompting traders representing Chinese steel mills to stay on the sidelines,” the miner-exporter added.
According to two other traders, the movement of offers both ways was largely a reflection of speculative trends in the futures market and the fluctuating prices of finished steel.
The two traders said that reports received in the local market indicated that Chinese steel mills were restricting their raw material requirement to ore concentrates and hence the low activity in iron ore fines physical trades.
In the Indian market, sources said that offers were also under pressure from surplus availability of volumes at Odisha mines.
Most Odisha mines had built up large volume stocks both at pitheads as well as at port stockyards as the mines had been operating at maximum capacity ahead of the monsoon season expected to set in by early June. Aggregating traders were also well stocked up and high stocks and low trading activity too were preventing offers from consolidating at higher levels, the sources added.