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Wednesday, January 25, 2012

Iron ore steady with a chance of slipping as China out

Wednesday, 25 Jan 2012

Reuters reported that iron ore steadied with trading activity nearly halted as top market China remained shut recently for the Lunar New Year holiday blunting any impact from miner Vale decision to lift a force majeure on Brazilian shipments.
Vale, the world No 1 iron ore producer said it has resumed mining and export operations after rains eased in southeastern Brazil. Vale earlier this month declared force majeure on iron ore shipments from Brazil a legal clause that allows a company to break contractual obligations because of heavy rains that cut its output by around 2 million tonnes.

Mr Dhruv Goel managing director at iron ore trading firm SteelMint in India eastern Orissa state said there are hardly any deals in the spot market with the Chinese away for the holiday and chances are prices may slip marginally.

But Mr Goel said Chinese demand for lower grade Indian iron ore has improved recently and he expects it to continue after the holiday. He said that "Chinese buyers are interested in buying low grade from India, as cargoes from Australia and Brazil are generally high grade."

India biggest iron ore miner, NMDC Ltd has resumed operations in the central state of Chhattisgarh which accounts for two-thirds of its annual ouput of 25 million tonnes after protests disrupted railway movements for 10 days.

Local protests had forced NMDC to halt production and exports of iron ore from the mines. The protest was called off after the federal government agreed to improve the overall rail network in the Bastar region a predominently tribal area that has roughly a fifth of India iron ore deposits.

Reflecting a slump in Chinese buying, the Baltic Exchange main sea freight index which tracks rates to ship dry commodities fell to its lowest in more than three years on Monday.

(Sourced from Reuters)

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