17.01.2011 18:15
Chinese iron ore market is seeing further upward movement amid moderate consumer activity. Indian fines with 63.5% Fe content are being offered at $182-184/t C&F northern ports of China, which exceeds last week's transaction levels by $2/t. Quotations of lump ore have gone up as well, standing at $184-186/t C&F. Ore fines with 60-61% Fe content are available at $168/t C&F, while lower-quality material is sold at $96/t C&F.
By the end of the week a 50,000-tonne lot of ore fines (65.3% Fe) will be delivered to northern ports of China from India. The material will be offered to Chinese traders at $185/t C&F. However, prices will probably continue moving up, as offers of similar material reach $187-190/t C&F at the moment.
The main reason for the upturn is limited supply to Chinese consumers. Besides, the existing shortage may be aggravated by expected tougher restrictions on exports from Indian government. Such factors as insufficient supplies from Brazil (mainly from Rio de Janeiro) due to heavy rainfalls and growing finished product prices in China are playing into the hands of suppliers.
Naturally, a $1-2/t increase in Indian offers has affected prices for ore fines from Brazil (64.5% Fe) and Australia (61.5% Fe), which are varying in the range of $181-183/t C&F and $175-177/t C&F, respectively, against early-January levels. Higher quality material (65-66% Fe) of Brazilian origin is priced at $190-191/t C&F.
Presently most steelmakers are not very enthusiastic about concluding contracts, as they are not sure whether prices for finished products will go up in short term or not. However, taking into account the above factors and depleted stocks, they are forced to accept suppliers’ policy. Some traders predict prices for Indian ore fines will be $190/t C&F after Chinese New Year.
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