Indian Iron Ore Exporters Increase Bookings Following Global Price Hike

SteelMint in conversation with market participants learned that few Odisha based exporters have ramped iron ore export bookings amid lucrative global iron ore prices post announcement of supply disruption from Australian and Brazilian miners.

As per reports received, an Odisha based major merchant miner has booked around 50,000 MT low-grade iron ore fines for export to China at USD 50/MT, FoB India for April shipment. Traders in Odisha are also learned to have booked decent quantities in recent past at the same price.

Global prices surge as miners cut sales estimates - Fe 62% fines index hit USD 92.9/MT, CFR China mark on 4th April’19. Positive outlook conducive for Indian iron ore exporters post Vale and cyclone Veronica hit at Australian ports. World's largest iron ore miners- released their output estimates for the year amidst the disruptions. Last week, Vale reduced estimate on its iron ore sales volume for 2019 between 307 and 332 MnT. This is lower by 75 MnT against its previous estimated forecast.

BHP Billiton announced its production will be affected by about 6-8 MnT amidst cyclone. Rio Tinto had declared force majeure to some of its contracts post-cyclone. Rio Tinto estimates the overall impact of cyclone is expected to result in loss of 14 MnT of production by the miner in 2019. As a result, the production is expected to be at lower end of 338-350 MnT.

Amid shrinking steel margins, Chinese mills are preferring low-grade iron ore and concentrate rather than going for high-grade ore & pellets. Following this, discounts on low-grade iron ore fines have come down to 13% which was around 16% a month back.
It is to be noted that export duty on low-grade ore is nil, making it more attractive for exports.

596,000 MT iron ore lined up for export at Indian ports - According to vessel line up data maintained with SteelMint and updated till 05 Apr’19, vessels carrying 596,000 MT iron ore is expected to be exported in April, out of which 387,000 MT is from eastern India ports.

Indian Iron ore exports increased sharply almost four times in Mar’19-: In the month of Mar’19, the exports increased significantly to 1.19 MnT as compared to 0.33 MnT in Feb’19 amid increased demand for low-grade ore from China on shrinking steel margins.