China’s iron ore import prices rose this week to $77-78 per tonne
Supported by higher freight charges.The price of 63.5% fines rose from $74-76 last week on a cfr basis as freight rates edged up and discussions began in India about putting an export tax of 15% on iron ore fines.Freight charges from India have risen to $16-17 per tonne for panamax vessels, while freight rates from Brazil are now as high as $47-48 per tonne, up from $40-41 last week.
India's steel ministry earlier this week called for an iron ore export tax to help domestic buyers.“This will probably encourage Chinese buyers to purchase some before the policy is finally announced,” said one trader in China.
There are some indications that prices could move higher, with offers heard as high as $81 per tonne. Offers of Australian material have been less evident this week as prices have risen. “This encourages more demand for Indian fines,” said a sources at a steel mill in southern China.
Surprisingly, traders, rather than steel mills, are active in placing orders this week. “As $76-79 are near the implied 2009 benchmark price, so there is not much risk for traders to build up some stocks at this price level,” said the mill source.
“If prices go up another $6-7 per tonne, then it will be risky,” he added. But the China Iron & Steel Assn (Cisa) said this week that the outlook for steel prices in China is still uncertain, and with iron stocks still high in China, the recent rise in freight rates could reverse.
“If this upward trend ebbs away, Brazil-China freight rates may suffer. But freight rates from India and Australia to China won’t see a big dip,” another steel mill said.
Stocks of iron ore at main Chinese ports stood at 70.79 million tones as of the week ending-June 12, 90,000 tonnes up from the previous week’s 70.7 million tones.
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