An Indian trading firm sold this week 40,000 tonnes of 63.5 grade iron ore at $180 a tonne, including freight, a level last seen in April 2010, a company official said on Friday.
Prices of the steelmaking raw material had been steadily rising, with key price indexes at eight-month highs, due to tight supplies at a time when Chinese steelmakers are replenishing stocks ahead of the Lunar New Year.
There had been fewer high-grade cargoes out of India, the world’s No. 3 iron ore exporter, because of an ongoing ban on shipments from its Karnataka state and logistical problems elsewhere.
Traders said some buyers from top importer China may be securing supplies in case iron ore shipments from Australia, the world’s biggest exporter, are disrupted by the massive flooding there.
The cargo, for immediate delivery, was sold to a Chinese steel mill, Dhruv Goel, managing partner at iron ore trader Steelmint in India’s eastern state of Orissa, told Reuters.
“We’re getting a lot of inquiries from the Chinese side. There are offers at $181 to $183 a tonne, but I haven’t heard a deal above $180,” he said.
“The Chinese might not be getting supplies from Australia because of the flood. They want to play safe, they don’t want to take risks.
“I am hearing from the market that Chinese buyers are ready to pay more than $180 for 63.5/63 cargo,” said Goel.
Key price indexes rose on Thursday to their highest since May 2010 and forward swaps extended gains, suggesting prices will remain firm in the first quarter.
Source: Reuters
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