The Chinese iron ore buyers seem to have succeeded in curbing spot prices, which is evident from falling CFR China levels as well as reduced levels for FOB India.
Prices of various grades of iron ore fines FOB Indian ports have dipped by 5% to 13% in last 8 days. The weakness is more pre dominant in lower grades.
The slide is reported to be mainly due to the stance taken by Chinese buyers, which appears to have stemmed from their move to bring down spot prices. It is said that the surge in spot prices at crucial time, when annual benchmark talks are supposed to end, have put Chinese negotiators at back foot as miners are looking for settlement at levels close to prevailing spot prices. Thus it is reported that Chinese buyers are abstaining from the market, which is putting pressure on sellers, especially with positioned cargos.
The high inventory led weakness in construction steel market in China is also depressing sentiments in iron ore market