Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have started showing signs of running out of steam during the past week, moving down by $2/mt to $76.90/mt CFR China, with buyers reducing transaction volumes at higher price levels and with Chinese steel mills preferring port stocks over fresh bookings from the Indian market, traders said on Friday, January 19.
“Although offer levels did recover from the mid-week low of $75/mt, the restocking appetite of Chinese steel mills seems to be weakening ahead of the Chinese New Year holiday next month,” an Odisha-based miner-exporter said.
“The number of traders representing Chinese steel mills has been lower and most of them have been receiving offers but not concluding transactions, and this triggered a mid-week softening of offer levels. Talk of the $80/mt level often heard early in the month is now fading,” the miner-exporter added.
At least two other traders attributed the rebound from mid-week low to higher activity in the futures markets rather than to a revival of buying in the physical market. They said that offer levels are critically poised and may move in either direction depending on the strength of restocking by Chinese steel mills ahead of the holiday next month.
Sources said that, in India, supply-side support for offers from the closing down of seven iron ore mines in Odisha and the resultant shortfall in export volume availability, may also have been exaggerated, with operational mines being urged by the government to step up production in the short term.