Wednesday, February 16, 2011

Spot iron ore takes a breather

Spot iron ore prices took a breather on Wednesday after surging 4.5% on average over the past week to $197-199 per tonne cfr main Chinese ports for Indian 63.5% Fe fines.

Chinese mills have long been reluctant to book material, put off by the near record-high prices, and the dying down of the post-holiday restocking demand has allowed the market to calm down.

"When they need to, steelmakers are buying some imported iron ore at ports just to sustain regular production. Now that prices are almost at an all-time high, few dare to be reckless," said an iron ore trader in Shanghai.

Mainstream offers firmed at around $200 per tonne cfr during the day, with deals heard at $186 cfr for 61/61% Indian fines and $225 for 65% Russian pellets, traders told MB.

Prices may move up further but correction is expected by late March or April, said several market participants.

"I think it's a good chance for traders to sell at the moment as prices won't drop hard," said a Shandong-based trader.

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