Spot iron ore export prices from India improved by another 1% on improved buying by traders expecting bullish demand of finished products in the 2nd Qtr.
The current prices levels of Indian origin Fe 63.5/63% was USD 188 per tonne to USD 190 per tonne CFR Chinese port and has remain ascendant since March end.
However below the surface there was enough fluidity in the market with most of the major mills reticent in buying as the liquidity crunch has affected them finally. With the relentless hike in lending rates by the PBOC most of the mills are facing liquidity squeeze on one hand the cost pressure compressing their profitability ratio to only 3%.
The current increase in prices has been of smooth gradient underlining the caution inherent in the market. The present ebullience in finished products has certainly galvanized the traders to take position for enhanced dividends as the seasonal demand picks up. It is to be seen with baited breath the tenacity of the mills vis-à-vis traders for the real picture to emerge
( Source: www.steelguru.com )