Spot iron ore prices from India have surged by a whopping USD 10 per tonne in just over a week. The reasons for this turnaround can primarily be imputed to enhanced buying by Chinese mills and curtailed supply from India with the onset of monsoon and ban on exports from Karnataka.
After the unexpected revival in Chinese domestic levels in the last 10 days hectic activity ignited both in the spot and swaps market.
Current transactions levels for an average size cargo 75000 tonnes 63.5%/63% are reported at USD141 per tonne to USD 143 per tonne CFR China.
But current offer levels are in the range of USD 143 per tonne to USD 145 per tonne as traders are holding on to the stocks expecting the prices to go up.
On the flip side the hiccups in domestic levels in China over the last couple of days has put a spoke in the wagon wheel.
The coming days will be crucial for iron ore spot as well as the swaps market. The sudden deceleration witnessed in steel price in China since 26th July has send jitters about the sustainability of this reprieve. The finished steel market is shuddering for stability despite fanciful analysis. It won’t be surprising if the iron ore prices take a dip towards the beginning of next week in view of caution by the traders.