Tuesday, June 07,
Spot iron ore prices in China are expected to remain firm as Chinese steel mills look forward to restock, allowing prices to rebound after losing around 6% last month.
“As far as the physical market goes, most people are expecting or talking about a spike in demand to come at the end of this week or early next,” said Gareth Hudson, iron ore broker at London Dry Bulk.
A sharp jump in prices of forward swaps on Monday reflected investor optimism about a recovery in physical prices. The Singapore Exchange-cleared June contract rose by $5 to reach $173, July gained $4.05 to $171. However, volumes remained thin.
Iron ore shipments from Karnataka are likely to resume within 15 days. But traders said they did not expect overseas sales to pick up before September when the monsoon season traditionally ends. Whereas, supply from Goa is said to be very low as monsoons have already hit Goa.
According to traders, “Anticipated rise in demand and reduced supply from India is likely to keep the iron ore prices firm. Prices could rally around $5 from the current levels of around $175/MT but Chinese appetite could wane again when prices rise beyond $180 as it did in May”
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