December 08,...

December 08, 2007

http://www.steelguru.com/news/index/2007/12/08/MzE5Mzg%3D/Iron_ore_prices_in_China_on_upswing_again.html

Iron ore prices in China on upswing again


It is reported that due to the price rise of Chinese domestic iron ore, the restriction of the export of Brazilian iron ore and the general increase of steel price since December, market price of imported iron ore is likely to further increase.

As per report in North China, in December there is a new round of price rise in iron ore market. The limitation of electricity in Tangshan and the accident in Anshan are two factors boosting the price to increase. As a result, the supply of domestic iron ore concentrate is much shorter which has accelerated the price rise in the northeast of China. At present, the real EXW price of iron ore concentrate in province Hebei is as high as CNY 1,600 per tonne up by 19% as in early November 2007. The price is already higher than spot price of imported iron ore. If the situation would continue, steelworks may be forced to increase the purchase of imported iron ore.

It is realized that, due to the heavy rain and the jam at port recently, CVRD has cancelled 20 vessels of iron ores which were planned to be exported in December, among which there are 8 to 10 vessels were supposed to sail to China. Consequently, an analyst from Umetla.com believes that Chinese import volume of iron ores from Brazil in next January could decrease by around 1.5 million tonnes, so there could be conflicts between the supply and demand for iron ore before Chinese New Year in 2008.

Moreover, Baosteel has raised steel price for Q1 in 2008 which has boosted national steel price rise. Analyst expects that if the market condition would continue, blast furnaces that were closed down before would resume production which would enlarge the demand for iron ore.