Iron ore prices drop

June 13, 2008

June 13th (Herald) – Export prices of iron ore have dropped 8-11 per cent as stockpiles have built up at Chinese ports, trimming demand from India’s leading customer of iron ore. The interest for Indian ore is weak, President of the Federation of Indian Mineral Industries Rahul Baldota told reporters.
China is the main market for India’s iron ore exporters like Sesa Goa. India exports about 90 million tonnes of iron ore, with most sales on a spot basis. The export price of ore has dropped by $10 to $15 a tonne to around $115 in the past six weeks, Baldota said, adding that a combination of factors had led to the fall.
Australian ore is available in the spot market, and stockpiles of imported ore at Chinese ports has hit an all-time high of nearly 80 million tonnes. The severe congestion there is contributing to a rise in freight rates.
“Chinese steel mills have already piled up stocks they need ahead of India’s monsoon,” Pawan Burde, senior analyst at Angel Broking, said. Iron ore exporters expect demand to pick up after the Olympics in August.

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