Asia Iron Ore-Prices Up On China Demand But Trade Cautious
December 4th, 2009 | File Under : Companies - Iron Ore - Mining Exploration
Asian iron ore prices hardened on Thursday on consistent Chinese buying that drove up freight costs as well, even though high steel output in China inspired caution in some buyers.
“Prices are increasing everyday,” said a dealer in a mining and exporting company in eastern India. “There is demand, but people are buying cautiously.”
The exporter said his last deal was done on Wednesday at $108 a tonne with freight, for ores with 63.5 percent iron. “Now we are looking for $111.”
In China, industry consultant Mysteel quoted ores with 63.5 percent iron of Indian origin at $104-$106, up from last week’s $101-$103.
China’s appetite drove up freight costs up around the world, helping push up iron ore.
The Baltic Exchange’s main sea freight index .BADI, which tracks rates to ship dry commodities, hit a 2009 high on Wednesday, rising 5.98 percent to 4,643 points. [ID:nLI136644]
In India’s eastern ports the cost of freight jumped to $24 a tonne on Thursday, from last week’s $20, another exporter said.
A dealer in a large international trading company based in south India said a correction could be expected.
“There is resistance from China above $100. We are not buying at these prices. We are waiting for the real direction to emerge,” said the dealer, who buys from Indian mines and sells to China.
China’s steel industry, the world’s biggest, had higher output in 2009, but demand was at a lower level, raising some worries about an oversupply. [ID:nSHA197493] SUPPLIES TIGHT
Iron ore mines in India’s eastern state of Orissa, where a government official said upto 50 mines have been asked to close since the start of this month as part of a government crackdown on illegal mining, stayed paralysed and supplies shrank.
About 13 percent of the country’s iron ore exports of about 106 million tonnes originate from Orissa.
The government’s action has also affected the transport of iron ore and one miner said even though his production was not closed, he was unable to take his ores to port.
“Things should get clearer in some weeks,” the miner said.
But the dealer in the large global trading company said Orissa’s lack of supplies was being made up by western ports and other international suppliers.
source : reuters.com
Find More Other News : iron ore demand - iron ore mine exploration - Iron Ore Prices - iron ore trade