Spot Iron nears 7 week's high; prices unlikely to move up further

Spot Iron ore hovers near seven-week highs, lacking momentum
to rise further with demand from top buyer China waning ahead of the Lunar New
Year and blunting the impact of weather-related supply disruptions.

Offer prices for imported iron ore in China were almost unchanged
on Friday. Prices of iron ore forward swaps also fell sharply on Thursday,
suggesting that investors are betting on a further drop in spot rates.

The Singapore Exchange-cleared January contract  lost more than $2 to $141.25 a tonne and
February  dropped $3.37 to $140.88.

Top iron ore producer Vale said on Thursday the heavy rains
that prompted it to cut production in Brazil and declare force majeure on
shipments will have minimal effect on global iron ore supply and prices.

But  the market is not
reacting to the supply problems because nobody is buying cargo now, said an iron
ore trader in Shanghai.

“We will
probably see prices start to soften next week when many start travelling for
the New Year holiday”, he added.