Indian export offers for high grade iron ore fines (with Fe content 63.5 percent and higher) have bounced back during the past week, increasing by $2/mt to around $56-57/mt CFR China, since buyers have returned to conclude modest deals after the long holiday in China, traders said on Friday, October 9.
"Buying activity has resumed after traders, who represent Chinese steel mills, returned to business. But the bookings of small volumes reflect the cautiousness in the market," an Orissa-based miner-exporter said.
"The revival of market activity is welcomed by the market but undertones are still cautious. Upside potential for Indian offers seems to be limited since aggressive restocking by Chinese mills is unlikely since steel prices are still under pressure," he added.
A section of the market sources said that, while the number of enquiries is definitely on the rise compared to previous weeks, this does not translate into matching transactions, indicating that buyers are waiting for another round of price corrections.
Offers are also expected to face supply-side pressures as miners including Vedanta look to step up normalization of mining operations in the western Indian state of Goa as also in the southern state of Karnataka, over the next two months, the sources said.
With Indian steel mills lowering capacity utilization, the rise in exportable surplus from mines becoming operational would check the upside potential of offers, the sources added.