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Asia Iron Ore-Prices dip as China (29-01-2010)
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Indian iron ore prices fell by more than one percent on Thursday from a week ago as Chinese buyers took a cautious stand amid credit tightening by the government, choosing to draw from stockpiles rather than opt for new cargo, traders and dealers said. "In China liquidity is poor and their new year is coming up. They have come together and no one is buying," said an iron ore dealer in an international trading firm in New Delhi.
A Hong Kong-based commodities broker said high stockpiles of iron ore in China were also responsible for the country's slowing demand and easing congestion at the ports indicated imports had slowed down.
"We've seen stocks go up a million tonnes in the last four weeks, which is quite interesting, but I think what you'll see is that material will start to be used again, and those stock levels will go down," said the Hong Kong-based broker.
On Thursday, Chinese consultant Mysteel quoted Indian origin ores with 63 percent iron content at $128-$130 a tonne C&F, down from $130-$132 last week.
In India's western state of Goa, popular for its low grade ores, 58 grade ores sold earlier his week at $107 with freight, down three dollars from a week ago, a local miner and exporter said.
Freight prices slipped by about two dollars over the week to $20-$22 a tonne in Indian ports for ships destined for north China. The Baltic Exchange's main sea freight index fell 87 points to 3,118 points on Wednesday.
Availability of ores continued to bother Indian exporters as Orissa state in eastern India which produces high grade ores and Karnataka in south India, a producer of both low and high grades, continued to see supply bottlenecks on government actions against miners and transporters.
"Everybody is struggling to find material," said the dealer in the international trading company.
TRADERS EYE RISING STEEL
Some traders said in the near term, prices could fall further in the wake of China's monetary tightening, yet some saw higher steel prices as a bullish indicator.
"We are getting inquiries but we are not selling a these rates," said an east India-based exporter who said China could drive up prices after its new year holidays end in third week of February when buyers return to the market with renewed vigour and funds.
Steel billet prices in the Black Sea region were higher with construction season approaching and in China, a steel industry body said rising raw material costs coupled with the recovering economies of the United States and Europe would support steel prices.
Source: Reuters
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