Iron ore prices have been improving relentlessly since mid July. The rally was kick started with an uncanny revival in Chinese steel prices round this time. Ever since the finished steel levels have lost steam but the iron ore prices propelled by extraneous factors has moved on with impunity.
With a whopping gain of 14% to 36% across the grades in the last 3 weeks market is abuzz with more fortune to come. The buying volume has not been commensurate with the offers and bid flying leading to ripple effect on the prices. Mills which had been largely dormant have woken up to stockpile volumes lest it becomes dearer. Traders on the other hand have joined the bandwagon to book volumes but of course peppered with circumspection given the fragility of revival.
In the last couple of days it seems Chinese buyers have lost interest in Indian cargoes and have changed their focus to Australian Pilbara fines and Brazil fines cargos. We are hearing that PB fines is around CNY 1140 per tonne to CNY 1160 per tonne and 64% Brazil fines cargo is around CNU 1200 per tonne to CNY 1240 per tonne in Chinese domestic market, these cargoes are being traded strongly in local spot
We are hearing that Fe63.5 iron ore offer price has dropped from USD 150 plus to below USD 150 per tonne. In china spot market Fe 63.5% is around CNY 1170 per tonne market starts to feel the price weakened a little bit.
Moreover iron ore stock having touched a high of nearly 75 million tonne owing to encouraged buying recently. Buying is likely to be subdued as the domestic prices have also relapsed ever since and the mills will be weary of going amok at their own peril.