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Spot price surge puts China at disadvantage in iron ore talks
By Hu Yang (chinadaily.com.cn)
Updated: 2010-03-01 14:31
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Iron ore's spot price in the Chinese market has surged to an 18-month high after the Spring Festival holiday, placing Chinese negotiators in the uphill price talks with major iron ore producers in an even more difficult position, the daily China Business News reported on Monday.
Price for Fe 63.5% ore imported from India was $140 to $142 per ton on Feb 26, $10 higher than before the holiday. According to Xiben, a domestic steel spot trading platform, the price for Fe 65% in Liaoning province, a major steel industrial base, increased 30 to 50 yuan per ton by Feb 25.
Analysts from Xiben attributed the price hike to steel mills' restocking after the traditional Chinese New Year, which fell on Feb 14 this year. Most mills stopped stocking iron ore since the beginning of February because of holiday traffic rush and bad weather.
The miners are asking the benchmark price to be more closely linked to the spot price, which the steelmakers oppose.
The supply might catch up with demand in March as the weather turns warmer and many small-to medium-sized mines in China resume production, easing steelmakers' dependence on imported iron ores, Xiben's latest report said.
China now imports 62 percent of the iron ore it needs, according to Luo Bingsheng, vice-chairman of the China Iron & Steel Association.
