Iron ore spot prices of Indian origin receded for the second consecutive time within a week. The slide has been quantum to set the alarm bells ringing in the trading circles. The price declined by 5% to 18 % across the grades in last few days.
After nearly 2 ½ months of blitzkrieg the withdrawal commenced quiet inconspicuously post stagnation for almost 2 weeks. Operators where watching with bated breath the developments during the interregnum however the final reckoning happened on 11th May with slide of 3% . The same pattern was replicated on 13th setting the tone for definite plummet.
It learnt that cargoes are being offered at USD 175 per tonne CFR for Fe 63.5/63 but failing to evoke any response although week back it commanded a price of USD 186 per tonne.
The beginning of this decline after nearly 2 weeks of impasse was brought about by
1. Continuous decline in domestic steel price levels in China
2. MoM jump of 27% in Chinese crude steel production in April bringing about fears of glut
3. Clamp down by state on the reality sector in China slowing the demand
4. Increment reserve ratio of Central Banks in China by 0.5% to curtail inflation
With the impending gradual shift form benchmark pricing based long term contracts to spot cargos, it has become more vital for both sellers as well as buyers to precisely monitor the daily movements of iron ore spot prices to keep tab on trends and spot opportunities.
This has galvanized us to start reporting domestic prices of iron ore at Barbil & Bellary and export prices on FOB Indian port.