Reuters reported that forward iron ore swaps are trending lower with investors unsure whether recent rally in spot prices this month can be sustained.
A ban on iron ore exports from Karnataka state has helped lift spot prices of iron ore but concerns about an oversupply of steel in top consumer China kept the gains in check.
Mr Danny Thompson broker at Freight Investor Services said “The outlook is still mixed. There''s a lot of conflicting views in the market and people are waiting for direction which is why we''ve seen the volumes dropping off a little bit, There are concerns of oversupply among steel mills although that is somewhat countered by concerns of shorter supply of certain grades from India with the Karnataka ban and the worry that that could spread to other states.”
The report cited an iron ore trader in Shenzhen as saying that “There were very few deals last week and also very few cargoes. There was an offer for 63.5% at USD 160 a tonne but there was no interested buyer. Prices are likely to remain stable this week but let''s wait and see. I haven''t heard any deals so far.”