Bloomberg reported that Cash prices of iron ore shipped into China rose as much as 5% this week and may extend gains as some suppliers cut sales and concerns rise about a possible crackdown on traders in the world’s biggest buyer.
Ms Du Wei Umetal Research Institute’s Beijing-based analyst said prices for immediate delivery of Brazilian iron ore rose as much as CNY 35 to CNY 730 a ton this week. Ore from Australia gained 4.8% to CNY 660 while Indian supplies rose 4.7% to CNY 670.
She said that Vale SA, Rio Tinto Group and BHP Billiton Ltd, the three largest suppliers are cutting cash sales to China to ensure supplies to customers in Europe, Japan and South Korea who’ve agreed contract prices. China this week detained the head of Rio’s iron ore operations in the country and three colleagues for allegedly stealing state secrets.
Ms Du said “The price gains are mainly due to reduced spot sales to China as the miners sell more contract ore to other countries. Demand and prices for Indian ore may increase should the Chinese state investigation discourage purchase of ore from Australia and Brazil.”