India: SteelMint's iron ore fines export index rises to 2.5-year high on China price rally

SteelMint's weekly Indian low-grade iron ore fines (Fe 57%) export index increased by $3/tonne (t) w-o-w to $86/t FOB east coast on 16 November, 2023. In this week decent low-grade fines (Fe 54.5-57) booking reported around 275,000 t recorded by SteelMint. However, only two shipments got confirmed before publishing this article. Prices reached to 2.5-year high and these levels were last seen in July 2021, as per data maintained with SteelMint.

The Indian iron ore export market remained supported amid improved global spot and futures prices. Offers have remained firm over the last two weeks. As per sources, iron ore export prices rose amid an enhanced buying offer from China this week.

As per the sources few sellers were offering around $100-102/t CFR China too but no deal was reported so far this week. Surge in iron ore prices can be attributed to  strengthening of demand-supply fundamentals amid the concerns surrounding for production control and sintering cuts.

Price indicators:

•  Two deals of 110,000 t were reported this week and was taken into calculation. Thus, given 50% weightage. For detailed methodology Click here.
  
  
• SteelMint received twelve (12) indicative prices in the current publishing window and ten (10) were considered for price calculation as T2 inputs and given 50% weightage.
  
  

Market highlights:

• Hike in global iron ore prices: The benchmark Fe 62% fines index rose by around $4/t on a w-o-w basis to $132/t CFR China on 15 November. Prices have witnessed an increase amid the high blast furnace operation rates. As per reports, surge in iron ore prices seen lately can be attributed to various factors, including the strengthening of demand-supply fundamentals and the concerns surrounding Chinese steel production control and sintering cuts.
  
  
• DCE iron ore futures rise w-o-w: Iron ore futures on the Dalian Commodity Exchange (DCE) for January, 2024 contract rose by around RMB 26/t ($4/t) to RMB 965/t ($133/t) on 16 November. However, futures dropped by RMB 6.5/t ($1/t) d-o-d compared to RMB 971.5/t ($134/t) on 15 November.
  
  
• Iron ore port inventory in China inches up w-o-w: Iron ore inventory at major Chinese ports increased by around 1.8 million tonnes (mnt) to 108.8 mnt on 9 November compared to the previous week, according to SteelHome data.
  
  

India's iron ore export shipments were recorded at 246,800 t in the third week of November compared to 231,500 t in the second week of November, as per vessel line-up data maintained with SteelMint.

Outlook

Low-grade iron ore offers are expected to remain supported in the near-term as sellers continue to receive inquiries from China and other regions. Also, the current positive market fundamentals of China may help the Indian iron ore fines offers remain firm in the export market.