Having dipped below the $50/mt mark last month, Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have continued to seek lower levels during the past week, edging down by $1/mt to the range of $47-48/mt CFR China as buyers continued to reduce transaction volumes, traders said on Friday, November 6.
"Buyers have been cautious about concluding transactions for large volumes as pressure on steel prices has continued to be seen during the past week and as Chinese steel mills have not been in the mood to restock," an Odisha-based miner-exporter said.
"No one is sure of any stability in the market. There is a lot of talk of offers hitting a new bottom of $40/mt before the end of December. Naturally, buyers are holding back from concluding transactions," the miner-exporter said.
Market sources said that Indian offers would have fallen sharper had it not been for aggregating traders who have been maintaining their offers and have not been inclined to conclude low-margin transactions ahead of the festival next week and the closure of accounts by many in the market.
However, the sources said that, with prices of stocks at Chinese ports declining, Indian exporters will also have to lower their offers in the short term and another $2-3/mt short-term downside risk is a distinct possibility.
Shipments from the western province of Goa have been increasing with major miners like Vedanta and Fomento Resources stepping up production, and supply side pressure will also increase the downward pressure on offers, the sources added.