With limited spot
supplies, price offers or imported ore in China remained firm on Thursday.
Offer for Indian fines Fe 63.5/63 inched up to $140/MT. Whereas, Australian
Fe 61.5 of Pilbara fines climbed by $5 to reach $136-$139/MT and Fe 63 of Newman
fines rose by $4 to reach $138-$140/MT.
Iron ore forward swaps also increased by 5-6% with prices
for December contract at a premium over the spot rates. Higher prices of forward swaps
reflect investor's expectation that spot iron ore prices could sustain the
recent gains.
“Mills are running on critically low iron ore inventories,”
said a Singapore-based trader. “Traditionally, they would hold between
6-8 weeks of iron ore inventories and now they're holding just a few weeks of
inventories, so they need to buy.”
However, China's steel futures have slid by more than 2% as
investors shy away due to the economic crisis in Italy and this threatens a
rebound in iron ore prices that is being noticed after the last month's slump.
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