China's iron ore import prices rise to $81/T on higher freight fees

China's iron ore import prices rise to $81/T on higher freight fees

China's spot iron ore import prices have risen by around 4-5% to $81 per tonne cfr for fines of 63.5% ferrous content, mainly due to higher freight charges. Freight charges have been rising on China's recovering demand for iron ore, according to market participants.

The freight charge from India to China has increased by $2 per tonne over the week, an iron ore trader in Shandong province said. Indian suppliers have increased their offer prices for 63.5% grade fines to $84-86 per tonne cfr from last week's $82-83 per tonne cfr despite receding demand from Chinese steel mills and trading houses, indicating their strong confidence that the market will improve after the Chinese New Year holiday.

"They must be optimistic about higher prices after the holiday, otherwise, they will not raise their offer prices when the market response is not so great," an iron ore trader in Shanghai said. Spot supplies from Brazil and Australia seem to be drying up.

"After conducting spot sales in the last few months of 2008 due to a number of long-term supply contract deferrals, they have shifted their focus back to Chinese steel mills with the start of the supply year as China's demand has picked up," an iron ore trader in Beijing said.

China's iron ore imports in December increased 6.18% from November to 34.53 million tonnes. Its full-year iron ore imports for 2008 reached 444 million tonnes, up 15.9% year-on-year.So far, no official estimate on this year's iron ore imports has been heard.