Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have lost momentum during the past week, moving down by $4.10/mt to $86.55/mt CFR China as concerns over supply disruptions eased and amid the weakening of futures prices, traders said on Friday, April 19.
“The easing of worries over supply disruptions and reports that Brazilian iron ore mines would be back in production meant that the expected shortage of raw material might not last as long as feared,” an Odisha-based miner-exporter said.
“It also means that there is a likelihood that the recent rush by buyers for high alumina-content Indian iron ore fines will also not last and that there will be higher volume availability in the local Indian market, putting pressures on offer price levels,” the miner-exporter added.
Market sources said that the reversal of the earlier uptrend during the past week has occurred amid very thin trading, as a large section of buyers has stayed away from concluding bookings, preferring to wait for offers to find a further lower bottom and for the downward movement to gain momentum.
The sources said that the softening of offers could pose a risk to a large number of miner-exporters who have been increasing production ahead of the monsoon rainy season which is expected to spread across the eastern region from June onwards. They said the combination of higher volume availability and improved higher global supplies would possibly ensure that offer levels would seek a bottom of around $80/mt in the medium term.