iron ore prices rocketing

170 A TON !




Iron Ore-Spot prices extend rally, seen hitting $170/tonne
Wed Nov 10, 2010 5:14am GMT Print | Single Page [-] Text [+]
* Tight Indian supplies, Chinese stockpiling boost prices
* Sellers waiting for further price rise
By Manolo Serapio Jr.
SINGAPORE, Nov 10 (Reuters) - Iron ore prices rallied on
Wednesday, extending recent gains, reflecting tight Indian
supplies and Chinese steel mills boosting stockpiles in
anticipation of a recovery in steel demand.
The recent big gains in Shanghai rebar futures and the
dollar weakness had also spurred the surge in spot prices of
iron ore, with traders saying it could touch $170 a tonne this
week, more than $10 higher than the current index price.
There is talk in the market that Indian exporter Sesa Goa
(SESA.BO: Quote) sold 63 percent grade iron ore fines at $167.50 a
tonne, cost and freight, to a Hong Kong firm, traders said, a
level last seen since May.
"It's still cheaper to buy off a stockpile, so I don't know
why people are paying these prices for spot cargoes," said Ben
Webb, broker at London Dry Bulk in Hong Kong. "It doesn't make
any sense to me at all."
"But sellers are waiting to see how far this is going to go
up, and it's likely to hit $170 plus this week."
Offers for Indian ore with 63.5 percent iron content were
as high as $167 a tonne, C&F, China on Wednesday, from around
$165 on Tuesday, said Chinese consultancy Mysteel.
The Steel Index (TSI) iron ore benchmark .IO62-CNI=SI
rose 0.7 percent to 158.30 a tonne, C&F China, at the end of
trade on Tuesday, its highest since May 18.
Highlighting market expectations of further gains, iron ore
forward swap prices continued to outpace the TSI on Tuesday,
with the November SGXIOc1 and December SGXIOc2 contracts
each at $164 a tonne and the first-quarter contracts IOCS=SGX
all above $160 a tonne.
"There's supply tightness and mills want to raise stocks,"
said an iron ore trader in Singapore.
"Steel prices are up and they want to buy ore and they're
not finding the material in the market so they're bidding high
and swaps are going very strong."
Shanghai rebar futures SRBc7 eased on Wednesday after
touching 15-month highs in the previous session, driven by
hopes of a pickup in steel demand in top consumer China.
Supply of iron ore from India, the world's third-largest
exporter of the steelmaking raw material, had been tight
because of a continuing ban on shipments from the southern
state of Karnataka.
"We're getting more inquiries and there are still few
available cargoes," said Dhruv Goel, managing partner at iron
ore trader Steelmint in India's eastern state of Orissa, adding
he sold 40,000 tonnes of 63.5 grade cargo at $162 a tonne, C&F,
on Tuesday.
(Editing by Manash Goswami)