Global iron ore prices are witnessed at USD 64.1/MT, CFR China as on 28 Oct’16. Prices were up as there is a strong demand for iron ore from Chinese mills as they want to complete their projects before the winter season sets.
In addition, surging coking coal prices have also lifted iron ore prices as Chinese buyers prefer using high-grade material over the low grade in order to minimize the usage of coking coal. Alongside, there is also supply shortage of high-grade iron ore at some Chinese ports which also drove up iron ore prices.
It is to be noted that some mills have started to put blast furnace under maintenance due to high coal prices.
The increase in coking coal and coke prices has benefited Fe 62% and Fe 65% iron ore products while it remained un-benefited for Fe 58% iron ore product which is majorly imported by India. Currently, Chinese buyers are also looking for a heavy discount for low-grade ore.
Few market participants believed that for the coming few weeks iron ore prices may follow uptrend as coking coal and coke market is on the higher side.
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