re: Ann: $3.5m capital raising and presold of...
Hi All
This article was posted by fatstocks on the GDA thread earlier today.
IRON AND STEEL FIRST TIME SINCE AUGUST Demand boosts Chinese iron ore prices back above $100/tonne
The rise could weaken the Asian superpower's position in upcoming price talks Posted: Tuesday , 10 Nov 2009
SHANGHAI (Reuters) -
Benchmark spot Indian iron ore prices in China regained the $100-a-tonne mark on Tuesday, the first time since mid-August, on strong demand from the world's largest steel-making nation with record output in recent months.
Analysts and traders said prices could climb further as rising steel prices in China could spur more demand for the steel ingredient but supplies are expected to tighten due to an industry inspection in India's producing region.
The expected rise in spot prices of iron ore could weaken China's position in annual term negotiations.
The country is still struggling for deeper price cuts for 2009/10 annual contracts and is amenable to a limited rise in prices for the next April-March fiscal year.
Ore of 63/63.5% iron content for delivery in the future traded at $100-102 a tonne, including freight costs, with some miners asking prices of $106-108 a tonne, industry consultancy Mysteel informed its clients in a message.
Ore prices once topped $115 a tonne in early August, bolstered by strong steel prices in China, which expects its annual steel production capacity to exceed 700 million tonnes by the end of this year while output may reach 600 million tonnes.
Chinese spot steel prices have risen for a consecutive five weeks, and traders expect that the country's major mills such as Baosteel (600019.SS) will increase their sale prices for December, which analysts said could help to supply the physical market and encourage more output [ID:nSHA374816]
"A lot of smaller mills in China are running below capacity. The industry is cranking up and so the China iron ore trade data will probably surprise on the upside," said Mark Pervan, senior commodities analyst at ANZ in Melbourne.
"There has been a 7 million tonne draw on (Chinese) port stocks in the past six weeks or so and Port Hedland is loading record numbers of cargoes. All that paints a strong picture for apparent demand."
High demand for ore is underscored by several consecutive weekly declines in ore inventories at major Chinese ports, which fell by 2.4% last week.
SUPPLY TO BE TIGHTENED
"The market is hot, but actually we do not have much to sell. Everybody is seeking more sources in the market and we have heard that deliveries could fall quickly in coming months," said an iron ore trader in the eastern province of Zhejiang.
Worries over supply shortages emerged after an official said the government of the eastern Indian state of Orissa will inspect several iron ore mines in a crackdown on firms involved in illegal mining or violating environmental rules. [ID:nBOM480760]
Indian iron ore has been considered a perfect substitute for Chinese steel mills, especially after China detained four Shanghai-based staff of Rio Tinto's (RIO.AX)(RIO.L) on charges of stealing commercial secrets.
Indian iron ore exports jumped an annual 88% in September as Chinese demand picked up, and partly reflected a statistical effect caused by a slump in the same month last year in the wake of the world economic crisis. [ID:nBOM412963] (Reporting by Alfred Cang and Jacqueline Wong)
Looks like all the planets are lining up for a great year next year!!
NSL Price at posting:
16.0¢ Sentiment: Hold Disclosure: Held
(20min delay)