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Friday, September 18, 2009

Asia Iron Ore-China buys ahead of holiday, price stable

Friday, 18 September 2009

Iron ore prices in Asia remained nearly flat this week supported by moderate demand from China ahead of its holidays early next month, traders and dealers said on Thursday. "Buyers are turning a bit active these days. We have a week-long holiday ahead and need to prepare quickly," said a dealer at an international trading house in Shanghai.
Chinese markets will be closed from Oct 1-8 for the National Day holiday and Mid-Autumn Festival, ahead of which some traders need to buy for near term requirement.
Industry consultant Mysteel said ores of Indian origin with 63/63.5 percent iron were quoted at $83-$85 a tonne, C&F for forward delivery, compared to $82-$84 last week.
In India, a trader said he had heard of a deal done at $84 a tonne C&F.
A miner in western Indian state of Goa said he was quoting iron ore fines with 58 percent iron at $67-$68 C&F, but deals were not done as fines would be available for shipment by mid October.
"Demand is stagnant at the moment. People are waiting and watching," said Gaurav Atha, managing partner at K.N. Ram and Co in east India. "Buyers are asking for $80, but we are not selling." Freight costs reflected the slow demand.
The Baltic Exchange's main sea freight index .BADI, which tracks rates to ship dry commodities including iron ore, fell by 3 percent on Wednesday from a week ago.
Lower outlook for steel prices too cast a doubt over iron ore.
China's Baoshan Iron and Steel Co Ltd cut prices by 6 percent for October owing to high production.
But dealers and traders remained hopeful of China's long term demand.
"China would still need to buy iron ore as its steel market is the biggest and it can't stop producing it," a dealer in a large global trading company in New Delhi said.
Source: Reuters