Indian export offers of high grade iron ore fines (with Fe content of 63.5 percent and higher) have declined by $1.8/mt during the past week to $68.90/mt CFR China, as buyers have retreated soon after offer had touched the $70/mt and have stayed away anticipating the downturn to gain momentum, traders said on Friday, August 17.
“Offers above the $70/mt was clearly unsustainable as it was not backed by fundamental demand but driven by speculative trading and futures contracts,” an Odisha based miner exporter said.
“We learn that Chinese steel mills after having done modest re-stocking are not committing fresh bookings and since they are expected to reduce re-stocking further, current prices may decrease and hence most traders may be off the market,” he added.
At the same time, according to two traders there have been reports of at least two transactions of modest volumes have been cancelled by buying traders soon after offers fell below the $70/mt and this has impacted sentiments with local aggregating traders turning cautious in concluding transactions.
The traders said that with reports of adequate stocks at Chinese ports and buyers’ continued preference for iron ore pellets, local aggregating traders are unlikely to push higher volumes of fines and hence offers are expected to either remain flat or move in a narrow range once the short term correction in the market ran its course.