West coast Indian miner Fomento Resources has offered a cargo of 57%-Fe iron ore fines material through a spot tender Thursday, making this the first iron ore shipment the miner will send out of Goa after the state's mining bans were enacted three years ago. market sources said.
Fomento could not be reached for comment.
Sources who received the invitation to participate in bidding said this is the first official tender they have received from Fomento in over three years, which meant this 57%-Fe ore shipment was likely to also be the very first cargo the miner was shipping out from Goa.
The cargo will load November 5-15 from the port of Redi, according to sources. The 55,000 mt cargo contains 4.5% alumina, 4.5% silica, 0.08% phosphorus, 0.03% sulfur and 12% moisture.
"We are still discussing whether we want to participate in this tender," a Beijing-based trader said. "It's not so much a matter of whether we can get the material on time from India because of all the issues still surrounding loading, but it's more an issue of whether we can find customers who are willing to take on these cargoes and whether we can successfully resell at all."
With seaborne prices having slid below $50/dmt CFR China and expectations that further falls are likely, many Chinese steelmakers would focus on procuring medium-grade, mainstream material like Australian Pilbara Blend and Newman fines.
Such material is currently deemed affordable enough to mills, and the demand for lower grades containing below 60%-Fe was softening.
The Platts 62% Fe Iron Ore Index, or IODEX, has fallen 31% since the start of the year, being assessed at $49.65/dmt CFR North China Thursday.
"I never heard of a tender from Fomento before this one so it should be the first from them in three years since the bans," an international trader said. "And they also should be the second Goan miner to be shipping iron ore out."
Vedanta Resources was the first Goan miner to ship out iron ore since the mining bans were lifted, having sent out its first shipment October 19. This was an 88,000-mt cargo headed for a Chinese port on the Ao Hong Ma.
Vedanta was also the very first Goan ore producer to resume operations after the bans, successfully restarting mining activity at its Codli, Bicholim and Surla projects.
At the end of July, company sources at Fomento told Platts they would be looking to export 3.5 million-4 million mt a year of iron ore, of which 80% would be fines and the remainder lump.
The government has placed a 20 million mt annual production cap on Goan mines, and with Vedanta having been allocated 5.5 million mt of this, this would mean Fomento and Vedanta would make up 45-48% of this volume allowance.
