Sep06,2011
Reuters calculations showed that global miners are likely to keep iron ore contract prices steady in the fourth quarter, with spot prices stabilizing on firm Chinese demand and tight supplies,.
Based on Platts index prices IODBZ00-PLT for June to August, which top iron ore miners such as Vale and Rio Tinto use in fixing fourth quarter contract prices, the 62% grade averaged USD 175.63 a tonne, cost and freight, down marginally from USD 176.96 in March to May, the basis for third quarter pricing.
Contract prices jumped 20% to a record USD 179.24 in the second quarter, based on Platts index prices for December to February, as booming demand from top consumer China helped spot prices surge to a record of nearly USD 200 a tonne in mid February.
Platts based spot prices averaged USD 179 in August, up from USD 175.26 in July, amid weakness in other commodity markets fuelled by worries over a struggling US economy and a crippling debt crisis in Europe.
Mr Stella Wu iron ore manager at the Steel Index said that "Despite a depressed global economy, iron ore prices showed extreme resilience throughout August.”
Mr Wu said that "The monsoon hitting the east coast of India, as well as ongoing problems in Karnataka and shortages of domestic Chinese iron ore concentrate, have all contributed to extremely tight supply at a time when mills are looking to make bookings.”
India, the world's No. 3 iron ore exporter, sells the bulk of its cargoes via the spot market and fewer shipments from there meant more business for the top two suppliers, Australia and Brazil, even though miners from both countries sell most of their output via long term contracts, traders said.
While many expect prices to continue rising as purchases from China pick up going into the peak season, a trader in Sydney said he had yet to see any uptick in demand, suggesting price gains will be limited during the final third of this quarter.
(Sourced from Reuters)
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