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Indian IO exporters still under pressure in slow spot market - 21 December 2011

The spot market for iron ore imports into China remained depressed for most of last week but a flurry of trades on Monday, chiefly involving Brazilian and Australian cargoes, has helped arrest the decline in prices for now.

However, most market participants surveyed by Steel Business Briefing put little stock in the recent uptick in trading activity and note that market sentiment remains weak. They adopt a negative outlook for the ore market until year-end and early-2012, reasoning that bleak prospects for China’s economic environment and steel market in January could continue to depress the seaborne ore market.

On 16 December, a large Indian trading house agreed to sell 50,000 tonnes of 63.5%/63% Fe fines to a Chinese trader at $140/t cfr, shipping from Paradip to main port China. Market sources estimated average transaction levels for this ore grade at $138-141/t cfr, as on 20 December, but also pointed to a lack of offers from Indian exporters and reluctance on the part of buyers to trade at levels higher than $140/t. “Buyers are still eyeing transaction levels of $136-137/t cfr for this material,” an Odisha-based trader tells SBB.

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, expecting steelmakers to restock ahead of the Chinese New Year holidays. “There could be just a slight rise in prices but no alarming increases,” a Bangalore-based source expects.

Indian iron ore export prices

©SBB 2011

63.5%/63% Fe fines

 

$/tonne cfr China

22 November

148-150

29 November

134-138

6 December

144-146

13 December

141-143

20 December

138-141

*27 December

138-140

*SBB forecast

 

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