Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have closed the week at $63/mt CFR China, remaining unchanged on week-on-week basis, amid low trading activity and a lack of buyers in the market, traders said on Friday, October 20.
“Much of the losses during the week were offset by gains on the last day of the week. But much of the rebound was the result of resumed activity in futures rather than due to interest in physical buying,” an Odisha-based miner-exporter said.
“The outlook remains pessimistic. Chinese steel mills are not inclined to restock and are mostly sourcing port stocks instead and traders representing them are mostly staying away from the seaborne market,” the exporter said.
“Despite the recovery on Friday, it is only a matter of time before offers below $60/mt are seen in the market and so buyers are almost absent from the Indian market. It is difficult to forecast the next bottom,” he added.
Two other traders said that there is no significant support for offers as most key drivers - finished steel prices, output levels of Chinese steel mills - are all very negative and, barring modest activity in futures, there is a complete lull in the market.
In the Indian market, aggregating traders have retreated as current prices offer negative margins and only a few large miner-exporters with comparatively lower fixed costs are seen to be concluding transactions for small volumes, the traders added.
Market sources said that, in absence of overseas buyers, miner-exporters are being forced to increase domestic sales and several such miners in the eastern Indian state of Odisha are already lowering domestic prices to compensate for lack of exports and to prevent build-ups at mine heads.