India's iron ore prices remained flat this week amid low Chinese interest, with some mines choosing not to sell as firmer steel prices sharpened hopes for a turnaround, miners and exporters said on Thursday.
"We are producing in the normal manner but not doing any deals," said one large miner located in the southern state of Karnataka. "If the current situation in the metal market is any indication, prices may turn around soon."
Chinese spot steel prices edged up last week after sliding 4 percent earlier amid hopes of production cutbacks in the world's top producer.
Also, steel billet prices in the Black Sea and Turkish market rose last week as production cuts tightened the market and resilient Egyptian steel demand supported prices.
Indian miners said they waited for the international benchmark prices to be set that would give them a better indication of future prices. Indian miners also waited for a cut in railway freight costs that would help them improve their tight margins in the bearish market. "The railways should lower freight rates now that business is down in the same way as they had increased rates when business was up," said one miner in east India.
The miner last sold ores with iron content of 63.5 percent at $66.1 a tonne with freight on Friday, nearly the same as earlier last week.
An official of the Federation of Indian Mineral Industries (FIMI) said benchmark rates were stagnant from last week at $45-$46 a tonne, FOB.
One month iron ore swaps were quoted by Deutsche Bank at $65 a tonne.
In China traders said appetite was still strong after a record high amount of iron ore imports last month.
"Demand is good here and iron ore imports are more profitable as miners offered lower prices but better ores. We will keep on it," said a manager with a trading house in the northern province of Hebei, that had previously focused on minor metals but started an iron ore business this year.
Indian traders said most of China's higher purchases were sourced from Australia where some Chinese firms have invested, leaving Indian traders supplying smaller volumes of lower grades from the western coastal state of Goa.
"Quotes from the Chinese buyers are about a dollar higher than last week," said one exporter based in Goa.
The exporter said an increase in buying before the monsoon next month had raised demand slightly, but that had also congested the Goa port and shipments were delayed.
"Waiting period for vessels is 7-8 days against 2-3 days normally," the Goa-based miner said.
At four other ports in India, 1.01 million tonnes of iron ore waited to be shipped out as of Thursday and Wednesday, same as last week.
Source: Reuters
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