Friday, March 13, 2009
Contract iron ore price expected to drop 40 pct in 2009, foreign banks
Friday, 13 March 2009
China imported 46.74 million tons of iron ore in February this year, hitting a new high recently. This is achieved against the backdrop that China's steel products export hit a new monthly low since 1005 to be 1.56 million tons in February, according to statistics published by the General Administration of Customs on March 11 The sharp contrast between import and export figures is really a stimulant to the iron ore negotiation now in deadlock. A latest report published by ANZ points out hat due to China's sluggish steel export and drop of spot price of iron ore, the contract price of iron ore may drop 40 percent in 2009, surpassing the expectation of iron ore suppliers.
ANZ, the Australia and New Zealand Bank, states in its report that thanks to large-scale government investment plans, the price of steel products in China is obviously higher than on the international market at present, which will make China's steel products export very difficult. Up to present, steel price in China has dropped for four consecutive weeks, and some small and medium-sized steel plants have the plan of suspending production.
According to Umetal.com, offered price for 63.5-percent powder ore from India that arrived at Tianjin Port on Wednesday was 610 yuan per ton, down 10 percent from the 680 yuan at the beginning of the month.
Macquarie Bank also held that the present slumping of the iron ore spot market is very unfavorable to the iron ore suppliers.
Currently, spot price of iron ore in China is 67.5 US dollars per ton, near the lowest point of 63.5 US dollars in last November.
According to Umetal.com, iron ore inventories at 19 ports in China increased 1.59 million tons on week to 59.75 million tons at last weekend.
Source: China Mining
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