Friday, December 12, 2008
Friday, 12 December 2008
India's iron ore exporters say a small rebound in prices due to a spurt in Chinese demand does not indicate more substantial gains ahead, owing to the depressed state of the global steel industry. "The current recovery in prices is marginal. Nothing has happened in the Chinese market and the global steel market to warrant a significant rebound," Shivanand V Salgaocar, managing director of V.M. Salgaocar & Brother Pvt Ltd, a large miner and exporter said Iron ore prices have recovered in a small way in the last 10 days or so on renewed interest from Chinese buyers. India's export tax elimination on iron ore fines this week improved sentiment further.
On Thursday, iron ore with iron content of 63 percent was at around $56-$57 per metric tonne, about $5 higher than 10 days ago, an official from Federation of Indian Mineral Industries (FIMI) said. Last year around this time, iron ore traded at $120-$150, the official from FIMI said.
"I don't think there will be much improvement from the current levels given the (economic) scenario that we are seeing," said an executive from a private mine in north India, not wishing to be named.
"I don't think there will be a revival to earlier levels," the executive added.
Salgaocar said spot prices may gain some more owing to Chinese buying, but the long term benchmark price, when it comes in for renegotiation in April, may fall.
Long term prices for Goan fines with 61 percent iron are at about $79 a tonne, he added.
Provisional figures obtained from FIMI showed India's iron ore exports in November was at 8.65 million tonnes, higher from the previous month's 4.4 million tonnes.
But exports were down over 8 percent compared to 9.44 million tonnes exported in November 2007.
Another export association head said only when the increase in inquiries from China materialize into orders that the prices had a chance of sustaining the gains.
"The market is probably reshaping itself and is trying to stabilize," said Glenn Kalvampara, secretary of Goa Mineral Ore Exporters' Association.
As adapted from Reuters