It is reported that abundance of Brazilian and Australian cargo offers is playing havoc with the spot iron ore levels off late.
The market having lost nearly 3% in the last 1 month although not enough to set the alarm bells ringing but it has definitely changed the direction in the traditionally upbeat market before annual holidays.
Pre winter vacation witnesses enhanced buying by mills to stock material, however the prices have paradoxically entered corrective mode this year. Regardless of curtailed supply from India grappling with slew of export inhibiting directives volumes are being swapped by Vale and Australian miners.
Transactions are limited as the mills see no rationale in amassing volumes when the domestic finished market is sluggish and propensity to produce less. Moreover with the stockpile touching nearly 100 million tonnes at the port there is no hurry to stock material before the holidays.
Sentiment is not nearly as favorable and prices are likely to be weaker with subsequent trades. While some traders remain keen, Chinese buyers are less likely to commit at this time.
China imported 64.20 million tonnes in November a jump of 14.26 million tonnes from October. The bulk of the increment has come from Vale which has been aggressive in offers and supply switching over to short term price adjustments keeping in line with the market vacillation. As per report Brazil's iron ore export volume amounted to 31.8 million tonne in November, with a rise of 14.2% compared to October this year and increasing by 28.5% compared to the same month last year.
At the same time sharp fall in steel production as the domestic demand slumped has been also responsible for slow buying by mills. Crude steel production in China slumped to 47 million tonnes in November from 55 million tonnes in October MoM drop of 15%.
Stockpile amassed at nearly 100 million tonnes in the thin of production season is barely a cause for indulgence by mills.
Iron ore fines
FOB India
| Grade | Change |
| Fe 63.5/63% | -2% |
| Fe 63.5/62.5% | -2% |
| Fe 63/62% | -2% |
| Fe 62/61% | -2% |
| Fe 61/60% | -2% |
| Fe 60/59 % | 0% |
| Fe 59/58 % | -1% |
| Fe 58/57% | 0% |
| Fe 57/56 % | 0% |
| Fe 56/55% | 0% |
| Fe 55/54 % | 0% |
| Fe 54/ 53 % | 0% |
| Fe 53/52 % | -1% |
| Fe 52/51 % | -2% |
| Fe 51/50% | 0% |
Change is on Dec 16th as compared to 9th Dec 2011
With the impending gradual shift form benchmark pricing based long term contracts to spot cargos, it has become more vital for both sellers as well as buyers to precisely monitor the daily movements of iron ore spot prices to keep tab on trends and spot opportunities.
This has galvanized us to start reporting domestic prices of iron ore at Barbil & Bellary and export prices on FOB Indian port.
Domestic iron ore spot pricing information updated 5 days a week whereas export spot prices FOB Indian port as and when they change
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(Sourced from www.steelprices-india.com)
