Indian iron ore offers above $80

Indian iron ore offers above $80 although market weakens

Indian iron ore traders have raised their offers to China as high as $83 per tonne cfr, from $80 last week, for fines of 63.5% ferrous content, despite falling demand in China.

"Under current circumstances, I think all offers higher than $80 will be given the cold shoulder by Chinese steel mills. Demand has not shown very positive signs, and they will not be happy to pay more than $77-78 per tonne cfr," said an iron ore trader in Beijing.
Other market participants shared the sentiment."Despite continuous but modest steel price increases in the Chinese domestic market, no one is certain of the fundamentals for this year," said a trader in Shandong province.

"The price increases are based more on Beijing’s 4 trillion yuan ($586 billion) stimulus package and speculation from some steel trading houses than anything else, so the iron ore offer increases are not appealing at all," he added.

Two deals in small volumes were reported at $82-83 per tonne cfr, but there was general agreement that $77-78 per tonne cfr were the mainstream transaction prices.

Over the week, Chinese iron ore traders also noted the recent reduction in enquiries from Chinese steel mills against three or four weeks ago. "It seems that many steel mills have enough stocks to see them through the Chinese New Year, so the next round of purchases, if it does come, will probably be in late February after the holiday," an iron ore trader in Shanghai said.
Great uncertainties still persist in the domestic and global steel market, leaving opinions divided on the short-term prospects of the iron ore spot market. Iron ore trading houses have shunned away any speculation attempts.

"Nowadays, all the uncertainties make it hard to even look beyond February, so I do not think anyone would dare to bet on upturn and stock up," a second iron ore trader in Beijing said.Chinese New Year falls on January 16, and the celebration in China will go on for about two weeks.

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