Inactivity plagued the iron ore market as the uneventful week drew to a close. The market remained in quandary with offered and transaction prices showing wide gaps making judgment an extremely difficult proposition.
But it is clear that Chinese steel mills have gained an upper hand cornering cheaper prices depending on the vulnerability of the Indian iron ore miners and suppliers.
Offers for Indian origin Fe 63.5/63% plummeted to levels of USD 191 per tonne to USD 193 per tonne CFR China.
The Libyan and Egyptian crisis took its toll on the metals futures markets Futures market of imported iron ore posts a weak trend. Favorable factors such as tight supply and RMB appreciation notwithstanding, imported iron ore will continue to see corrections on concerns of tight liquidity and adverse political environment.
The correction was in the offing owing to the following reasons
1. Chinese mills having enough stock to meet their requirements till March
2. Drop in prices of finished steel products in China after Spring Festival by CNY 80 per tonne to CNY 100 per tonne.
3. Indian miners are in hurry to fulfill yearly targets as it draws to a close on 31st March.
4. Urgency in shipping out before the Indian budget in order to avoid re negotiation if the export duty increases
Market operators opine the lull in activities will continue till beginning of March with small correction of up to USD 2 per tonne till the time the finished market stabilizes. However the prices are not expected to go downhill given the constricted supply from India and decline in shipments from Australia due to prolonged bad weather.
FOB India
| Grade | Change |
| Fe 63.5/63% | -2% |
| Fe 63.5/62.5% | -2% |
| Fe 63/62% | -2% |
| Fe 62/61% | -2% |
| Fe 61/60% | -2% |
| Fe 60/59 % | -3% |
| Fe 59/58 % | -3% |
| Fe 58/57% | -4% |
| Fe 57/56 % | -3% |
| Fe 56/55% | -2% |
| Fe 55/54 % | -3% |
| Fe 54/ 53 % | -4% |
| Fe 53/52 % | -6% |
| Fe 52/51 % | -8% |
Change is on Feb 25th as compared to 18th Feb 2011
With the gradual shift form benchmark pricing based long term contracts to spot cargos, it has become more vital for both sellers as well as buyers to precisely monitor the daily movements of iron ore spot prices to keep tab on trends and spot opportunities. This has galvanized us to start reporting export prices on FOB Indian port as and when they change
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