Indian iron ore spot prices this week
July 31, 2008
July 31st (Steel Guru) – China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters has released the average reference prices for import transactions of ferrous 63.5% Indian iron ore concluded last week on July 28th 2008 as under
| Delivery | This week | Last week |
| FOB Indian port | 136 to 140 | 135 to 143 |
| CIF Chinese port | 180 to 188 | 182 to 199 |
Price in USD per tonne
The change is with reference to that posted on July 21st 2008
The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China’s booming steel industry. The China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters are the largest trading association in China.
NMDC iron ore export pricing policy undecided as yet
July 30, 2008
July 30th (Steel Guru) – FE reported that the steel and commerce ministries are pitted against each other over National Mineral Development Corporation’s demand for upward revision of iron ore prices in its long term supply agreements with Japan Steel Mills and South Korea’s POSCO.
As per report, while the steel ministry has endorsed the state owned mining giant’s proposal to include rail freight and 15% export duty costs on top of a higher price for iron ore, the commerce ministry has opposed it saying India would risk jeopardizing its commercial relations with the 2 countries.
Mr RS Pandey steel secretary said that Australia and Brazil had already secured a much higher percentage hike compared with last year’s prices. Steel ministry is reported to have said that long term agreements were between business enterprises of the 2 countries not between the governments thus NMDC should take commercial decisions in its own interest.
On the other hand the commerce ministry observed that revenues from rail freight and export duty accrue to the government only and hence should not be built into the export price. It also asked the PSU not to insist on getting reimbursements in view of the larger public interest and Indo Japan relations.
Indian iron ore imports prices this week
July 25, 2008
July 25th (Steel Guru) – China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters has released the average reference prices for import transactions of ferrous 63.5% Indian iron ore concluded last week on July 21st 2008 as under
| Delivery | This week | Last week |
| FOB Indian port | 135 to 143 | 135 to 155 |
| CIF Chinese port | 182 to 199 | 185 to 190 |
Price in USD per tonne
The change is with reference to that posted on July 14th 2008
The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China’s booming steel industry. The China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters are the largest trading association in China.
July 24th (Steel Guru) – According to statistics from Fuzhou Customs, province Fujian imported 2.68million tons of iron ore in H1 of 2008 up by 42% YoY. The import value was USD400 million up by 180% YoY while the average import price was USD148.4 per tonne up by 95% YoY.
Main exporters to Fujian in H1 were India, Australia, Ukraine and Iran. Import quantities from Australia, Ukraine and Iran were 813,000 tonnes up by 91.3% YoY, 581,000 tonnes up by 230% YoY and 189,000 tonnes up by 29.5% YoY respectively. The import volume from India was 855,000 tonnes down by 9% YoY.
As per reports, the total iron ore import volume from four countries hereinbefore accounted for 91% in total import quantity in Fujian.
NMDC seeks up to 97% jump in iron ore prices
July 24, 2008
July 24th (Business Standard) – Country’s largest iron ore producer NMDC is seeking up to 97 per cent increase in iron ore prices from foreign steel makers, a move that could have similar repercussions on the domestic market, which may result in higher steel prices.
Other than sponge iron makers, steel players like Essar, Ispat and RINL have long-term contracts with NMDC for iron ore supply.
Ahead of an Indian delegation’s visit to Japan and Korea to settle long-term contract prices with the steel mills there, NMDC has informed Steel Ministry, seeking nearly 80 per cent increase in prices of iron ore fines and over 96 per cent on lumps from the international clients.
This is significant for steel industry here, as domestic iron ore prices are determined on the basis of the percentage increase accepted by Japanese steel mills for NMDC’s products duly adjusted to rupee-dollar parity.
“If iron ore prices shoot up by 100 per cent, it will substantially add to our input costs, which may ultimately have a reflection on steel prices,” an industry official said.
Of its total 30 million tonnes annual production, NMDC exports around 3.5 million tonnes to Japanese steel mills and South Korea’s steel giant Posco under long-term contracts.
In a letter to Steel Ministry, NMDC said its finalisation of prices between Japanese steel mills and Posco has been guided by global price settlement of iron ore every year.
NMDC plans to go by the recent price-settlement by mining majors Rio Tinto and BHP Billiton with Chinese buyers.
Rio Tinto and Bao Steel had on June 25 agreed for price increase of 79.88 per cent on iron ore fines and 96.5 per cent on lumps.
Subsequently, BHP Billition settled its prices at the same level with Chinese buyers on July 4.
July 22nd (Steel Guru) – According to China Iron and Steel Association, two factors neglected by the Chinese side during the China and Australia iron ore price negotiations partially contributed to the iron core’s price hike in 2008.
Mr Luo Bingsheng vice chairman of CISA said that China experienced a rush import of iron ore with a fake demand. He said that “From January to May of this year the domestic production of iron ore increased 25%. After meeting the surge in industrial demand of 8.4%, there’s still a surplus supply of iron ore available domestically.”
He added that rising demand could have been covered through domestic iron ore production alone.
Mr Luo Bingsheng said Baosteel had not expected Rio Tinto to increase its iron ore price so dramatically. He said that “In rejecting the acquisition bid from its rival BHP Billiton, Rio Tinto increased its iron ore price substantially, therefore raising its stock value.”
July 16th (Steel Guru) – It is reported that, amid strong demand, due to supply side constraints, domestic spot prices for iron ore would go up from today by 6% to 7%.
| Product | Grade | Size | 14-Jul | 15-Jul | Change | % |
| Iron ore – BF | Fe 65% | 10-40 | 5500 | 5900 | 400 | 7.3% |
| Iron ore – Sponge | Fe 63% | 5-18 | 6600 | 7000 | 400 | 6.1% |
1. Rates are in INR per tonne
2. Rates are Ex mines but include loading into rakes
3. VAT or CST is in addition
4. Royalty is INR 19 per tonne for Fe content of 63% and INR 27 per tonne for Fe content of 65%
The price trend for last one month has been as under
| Product | Grade | Size | 23-Jun | 1-Jul | 15-Jul |
| Iron ore – BF | Fe 65% | 10-40 | 5000 | 5500 | 5900 |
| Iron ore – Sponge | Fe 63% | 5-18 | 6100 | 6600 | 7000 |
Change over last 1 month has been 15% to 20%
| Product | Grade | Size | Change | % |
| Iron ore – BF | Fe 65% | 10-40 | 900 | 18.0% |
| Iron ore – Sponge | Fe 63% | 5-18 | 900 | 14.8% |
Indian iron ore spot prices up by USD 10
July 15, 2008
July 15th (Steel Guru) – The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on July 14th 2008
| Delivery | Price | Change |
| FOB Indian port | USD 135-USD 155 | Up by USD 10 |
| CIF Chinese port | USD 185-USD 190 | None |
The change is with respect to prices posted on July 7th 2008
The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China’s booming steel industry.
July 15th (Steel Guru) – According to Customs of Guangzhou, in H1 2008 the imported volume of iron ore in China’s Guangdong province gained by 17.5% YoY to 5.24 million tonnes which is valued at USD 870 million and the price surged by 88.8% to USD 167 per tonne on average.
According to the Customs, it is the international iron ore talk and rocketing freight rate that combine to cause the increases in import volume and prices of iron ore in Guangdong province in the first half of 2008.
Baosteel’s first acceptance of 65% iron ore price rise earlier this year with Vale and then the settlement with Australian miners of 96.5 hike on lump lead to worldwide upsurge of this resource. Meanwhile, freight rate from Brazil to Tianjin port surges to current USD 80 per tonne from USD 20 per tonne in 2006, and the case is true with ports in Guangdong province. The rise in freight rate directly triggers cost increase of imported resource.
BHP, Rio settle iron ore prices with Europe-report
July 15, 2008
July 15th (Reuters) – Australia’s two leading iron ore producers, BHP Billiton Ltd (BHP.AX: Quote, Profile, Research)(BLT.L: Quote, Profile, Research) and Rio Tinto Ltd (RIO.AX: Quote, Profile, Research)(RIO.L: Quote, Profile, Research), have settled on a 71 percent rise in iron ore contract prices with European steel mills, an Australian newspaper reported on Tuesday.
The reported price rises are less than the near doubling of prices agreed with Asian steel mills but are in line with prices agreed with Brazil’s Vale (VALE5.SA: Quote, Profile, Research)(RIO.N: Quote, Profile, Research) in March.
BHP and Rio Tinto both declined to confirm the deals on Tuesday.
The Australian newspaper reported that BHP agreed to receive the same for its iron ore from steel giant ArcelorMittal (ISPA.AS: Quote, Profile, Research) that Vale had secured.
The two Australian producers earlier this month struck deals with Chinese and Japanese steel mills for a 96.5 percent increase in lump iron ore and a 79.88 percent increase for fine iron ore shipments in 2008/09.
BHP sends less than 2 percent of its iron ore to Europe. The Australian newspaper said the company is keen to show that it is a price taker in Europe where it is seeking European Commission approval for a $160 billion hostile takeover bid for Rio Tinto.
Rio Tinto said it had settled European iron ore contracts, but as the market made up only about 3 percent of its sales from Western Australia’s Pilbara, it would not reveal the extent of its price rises.
Prices varied with customers’ freight arrangements, a spokeswoman said.
Australian iron ore producers do not have the same freight advantage to Europe as they command over Vale with sales to Asia.
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