Iron ore prices in China have been moving up for past few days and has touched a six months high. 63.5/63 being traded at $171/Mt primarily due to tighter supplies from Indian exporters and delayed Australian shipments.
Secondly due to news that Major miners Rio and Vale will increase contract prices by 4-5%. More over Chinese mills owner tend to pile up stock before winters as it becomes difficult to transport raw material.
“Buying is majorly seen from small mills, big mills have enough stock for next few months. Though prices are inching up due to tighter supplies but as such there is no aggressive buying from Chinese steel mills.We need to be cautious at these levels, as steel majors have kept their Dec steel prices unchanged, where as China steel, Taiwan’s largest mill have reduced HRC prices by 5%” said a Chinese importer based in Beijing.
China Steel announced to cut its 2011 January&February quotation price, retroactive to December this year. HRC price was cut by ~US$32 per tonne (-5%) and the new quotation price is around US$620 (@USD/TWD 30.8, see table below for detail), lower than current China domestic spot US$645 but higher than East Asia import cfr US$605. We believe China Steel cut its price to secure customers and shipment, as its previous price was far too high above spot and downstreams have all been suffering
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