Imported iron ore spot prices up 30%

13:09, April 19, 2010      

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In recent days, iron ore shipped into China's major ports has showed a significant decline, while prices remain high. Analysts pointed out that the global ore giants have tightened shipments to promote their short-term contract pricing mechanism.

As of April 17, iron ore stockpiles in China's major ports totaled more than 68 million tons, 820,000 tons lower than the previous week, according to the statistics from Chineseport.cn.

Data from Mysteel.com showed that the price of iron ore powder with a purity of 65 percent imported from Brazil has surged to 182 U.S. dollars per ton, while high-purity iron ore imported from Australia hit 185 U.S. dollars per ton, showing 30 percent growth compared with mid-March.

Skyrocketing ore prices have forced some Chinese steel mills to turn to domestic miners. However, the price gap between domestic and imported iron ore powders has nearly been closed.

Australia-based Rio Tinto Group, the world's second largest iron ore supplier, announced on April 9 that the company is in talks with customers to switch to quarterly iron ore contracts.

Rio's move indicates that all three global iron ore giants (Vale SA, Rio Tinto and BHP Billiton) may abandon the year-long contract pricing mechanism for iron ore, a practice that has existed in the industry for 40 years.

Some Chinese steel mills believe that the three iron ore giants are colluding to fix prices and were tightening shipments to dominate the iron ore pricing negotiation.

Facing rising costs, domestic steel mills have no choice but to raise prices of steel products.

A recent survey conducted by Mysteel.com showed that over half of steel dealers believed that steel prices will continue to rise in this week.

By People's Daily Online

(Editor:祁澍文)

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