×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Iron ore prices dip, but some deals stir demand hopes

Iron ore prices dip, but some deals stir demand hopes
Comment E-mail Print Share
First Published: Thu, Jul 15 2010. 03 48 PM IST
Updated: Thu, Jul 15 2010. 03 48 PM IST
New Delhi / Shanghai: Iron ore prices in Asia fell 5% from a week ago as steel prices slumped, with traders expecting the more than 2-month-long slide to bottom out as few deals get done, pointing to return in demand.
“In the next few days prices have to stay stable for us to know for sure it is bottoming out,” said a dealer with a large international trading firm in south India. In the last couple of days the market had stopped falling and that raised hopes of an arrest in the slide, the dealer said.
On Thursday, China consultant Mysteel quoted 63.5 grade iron ore futures at $125 a tonne with freight, down about 5% from $132 a week ago. In comparison, the price has fallen 36% from a peak of $196 a tonne touched on 26 April.
Iron ore spot prices traded at $117.6 a tonne for the 62 grade iron ore on Wednesday, down $0.50 from a day earlier.
Still, traders in China continued to stay cautious amid lower steel prices and a weak outlook for demand, with one trader seeing more falls ahead.
“Medium- and small steel mills haven’t shifted their attention from domestic ore yet, and they are still using more of domestic ore due to its lower cost,” said an iron ore trader in Beijing.
The Beijing trader said he expected imported iron ore to fall further before bottoming out at around $120. “But it may not be able to continue rising for a long time after touching the bottom,” he added.
Top steel maker Baosteel said China’s big steel mills would not source their iron ore from spot markets even if prices turned out to be cheaper.
In India, a fresh call from a government official for curbs on iron ore exports worried traders and exporters.
Steel secretary Atul Chaturvedi told CNBC TV 18 on Wednesday he wanted minimal iron ore exports as the non-renewable resource needed to be preserved for national use.
Traders said they expected a hike in export duty but it might not happen immediately because of low demand for iron ore in the international market.
“There has just been a fuel price hike and there are inflationary pressures which are making exporters’ costs go up. I don’t think the government will add to that by hiking the export duty,” said the south India-based dealer.
India currently levies an export duty of 15% on iron ore lumps and 5% on iron ore fines.
Freight costs softened further this week in the international market and in the Asian region owing to fewer shipments.
On Wednesday, the Baltic Exchange’s main sea freight index that tracks rates to ship dry commodities, including iron ore, fell to a fresh 14-month low.
In east India, freight for a single port loading in Paradip and Visakhapatnam to main port China was at $14 a tonne, said an exporter in Orissa.
Double port loading in the east coast of India to main port China was quoted at $16-$17 a tonne, the exporter said.
Comment E-mail Print Share
First Published: Thu, Jul 15 2010. 03 48 PM IST
More Topics: Iron Ore | Asia | Demand | China | Money Matters |