Via Macquarie:
Non-major iron ore slips on Indian summer: Iron ore numbers reveal a marked slump in nonmajor, seaborne supply as India remains largely out of the seaborne market. Despite a sharp uptick in prices during July, Chinese imports from non-major supply, a very price elastic segment of the market, fell to 10.3 Mt, the lowest this year. India is the culprit: exports to China totalled only 0.66Mt in July – equivalent to an annualised run rate of only 7.7Mt/y, compared to more than the 40Mt/y rate achieved in Q1. The ongoing monsoon season means that a weak print from India was always expected, but the July number came in below our expectations down 33% YoY. We continue to expect a strong comeback in the coming months: at current spot prices and Fe discounts, exports from Goa breakeven around $65/t and are cash positive. This should provide miners with a strong incentive to resume exports once the monsoon season ends in September.
Goan ore is much cheaper than that. But the argument is right.