Asia Iron Ore-Mkt rife with talk of India deals at $140/t-$143/t

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

25 Feb 2010

India's iron ore trade abounded with talk of deals done at $140-$143 a tonne, a level last seen in 2008, but confirmed deals were concluded at levels slightly below those prices, dealers and traders said on Thursday. Dealers at large trading companies said the sudden jump in the market had made them avoid positions even though China demand was strong after its Lunar New Year break last week.
"This is a dangerous level," said an executive in New Delhi from a large Chinese steel company who was not buying at current levels, but needed to soon. "I don't think steel prices are that high in China."
Several dealers in large companies said they last bought the benchmark ores with 63.5 percent iron earlier this week to sell to China at $137-$138 a tonne C&F, up from last week's $129 a tonne.
"It is a freaky market, it rose so fast, but I won't be surprised if we reach $140," said a dealer in a large trading firm in Mumbai.
In China, steel mills almost did not supplement inventories in time before the Lunar New Year holidays, thereby leading to a shortage, said Beijing-based trade information company Umetal.
"Spot resources at ports are now relatively in short supply, especially the high-grade kinds. Under the circumstances, Chinese traders are raising prices for imported iron ore," Umetal added.
OLYMPIC LEVEL PRICES
Iron ore prices last saw $140 a tonne levels in September 2008 when aggressive Chinese purchases for its infrastructure development for the Olympic games pushed up prices.
Dealers said China, the world's largest steel maker, has continued projections for steel demand even though there were some concerns about oversupply.
A shortage of iron ore supply in India, caused by a crackdown on illegal mining in ore-rich Orissa state in the southeast, and transport bottlenecks in another key mining area of Karnataka state in the southwest, also fuelled prices, dealers said.
"There is no cargo available at (major) ports," said a dealer based in east India who works for a large iron ore miner and exporter. "Only Goa is functioning normally."
Goa, on the western coast of India, exports mostly low-grade iron ore fines that China likes to buy to blend with high-grade ores procured from Australia.

Source: Reuters