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Indian iron ore export prices resume downtrend - 14 December 2011

Spot prices for iron ore imported into China are again trending downwards, falling by about $3-4/tonne over the past week, after an $8-10/t rebound the week before. Lacklustre Chinese demand and increased availability of competitively-priced Brazilian and Australian material are depressing spot prices, especially for high-grade ores.

Some Indian miners are offering cargoes of 63.5%/63% Fe fines at $148-149/t cfr China, but most market participants dismiss this price level as unattainable under present market conditions. Though trading of Indian-origin fines remains thin, theoretical estimates for transaction levels provided by most sources average $141-143/t cfr as of 13 December, down from $144-146/t cfr last week.

“Costly Indian cargoes are not attracting any buying interest,” a Bangalore-based source tells Steel Business Briefing. “When Brazilian material is trading at $137/t cfr, who will be interested in Indian offers?”

Both Indian and Chinese participants hold little hope of a sustained revival in the spot market in the short-term. Some expect a slight uptick in Chinese buying interest in early January, ahead of the Chinese New Year holidays.

But most are braced for continued weakness in the market, at least until February when the holidays will be over. “After prices fell in October, there has never been any real rebound,” a Kolkata-based trader muses.

Chinese sources note that the present lacklustre buying interest is in contrast to the seasonal year-end uptick in ore demand. “But with the economic uncertainties in China and also worldwide for 2012, the market is no longer following seasonal trends,” a Beijing-based trader notes.

Indian iron ore export prices

©SBB 2011

63.5%/63% Fe fines

 

$/tonne cfr China

15 November

148-151

22 November

148-150

29 November

134-138

6 December

144-146

13 December

141-143

*20 December

137-140

*SBB forecast

 

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