Indian export offer prices for high grade iron ore fines (with 63 percent and above iron content) have softened by $3-5/mt since last week amid low volumes to $105-107/mt CFR China, traders said on Thursday, October 4.
"There have been very few enquiries from Chinese mills during the week. Indian traders and miners are reluctant to book shipments of even these few orders, unsure of sourcing the necessary quantities," an eastern India-based trader said.
"Apart from high export tax and freight costs, there are too many political uncertainties over iron ore mining for exports. At current price levels, iron ore fines exports are not economically viable," the trader said.
Chinese buying interest has been on the wane for the second consecutive week. Unless aggressive restocking by steel mills in China resumes shortly, the Indian iron ore fines price is expected to move below the $100/mt mark, according to traders in Kolkata.
However, it is also possible that iron ore traders stayed out of the market since there are holidays in China and India. The coming week would give a clearer picture of demand in China and export volumes from India, the traders said.
One of the major reasons for exporters refraining from converting enquiries into bookings is that shipments from stockyards and jetties in the western Indian province of Goa have not been permitted this week as expected. The provincial government had not completed ascertaining volumes of iron ore fines at stockyards and jetties. While mining of iron ore in Goa has been suspended, exports were permitted from stockyards and jetties but only following certification from the government on the stocks' quantity and legality.