Spot Iron ore market in
China witnessed the much awaited re-bound after seeing a sharp down fall in
prices in the month of October. But slower steel demand and high ore stocks at
Chinese ports raise doubts on the sustainability of prices.
Highlights of the week:
* Offers for Fe 63.5/63 of Indian fines went up
to reach $ 137/MT (CNF), i.e. up by 7/MT from the last week.
* Prices of nearby iron ore
swaps rose, reflecting investor optimism of more price gains in the near term. The
Singapore Exchange-cleared November contract raised $2.33 to $128.50/MT and December
added $1.34 to $130.67 and January also gained $1.34 to reach $131.17/MT.
* Supply from India remained critical with a pause in Iron
ore transportation from Orissa & ban in Karnataka and closure of mines in
Goa.
* Australia's BHP Billiton 62-grade
MAC iron ore fines at $117.50/MT on Wednesday, up from the previous price of $116/MT.
While inquiries from Chinese
mills to buy iron ore have increased, purchased volumes are “not that
big,” said a shipping manager for an iron ore trading firm in Shanghai,
adding there is more interest in Australian cargoes which are deemed more
attractively priced than Indian and Brazilian material.
China's steel industry
association said iron ore stockpiles at eight major ports had now reached as
high as 98 million tonnes, with much of that bought at prices of around $165
per tonne. So, the decline in Indian supplies is unlikely to provide any
additional support to prices, especially as Australian and Brazilian suppliers
remain more than eager to fill the breach and it is expected to weigh on the
spot iron ore prices in the coming weeks.
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