China Shipping Container Lines Raises Rates
July 7, 2009
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China imports record volume of iron ore in March
April 17, 2009
April 14 (Xinhua) — China’s steel industry overestimated the country’s demand for iron ore and as a result imported a record high amount of the material in March.
A surge of domestic steel output and price increases in the beginning of 2009 raised market expectations. Many domestic steel mills and traders increased orders for iron ore in February and March as they anticipated demand would continue growing, said Liang Shuhe, deputy-director with the Foreign Trade Department of the Ministry of Commerce (MOC), at an industry conference in the port city of Tianjin Monday.
China’s iron ore imports topped 52.08 million tonnes in March, setting a monthly record high. It beat the last record which was just set in February. That’s when the country imported 46.74 million tonnes of iron ore.
In the first quarter, China imported a total of 130 million tonnes of iron ore. In 2008, iron ore imports totaled 440 million tonnes.
“The imports in March mostly came from orders made in February. Iron ore was priced at 80 U.S. dollars a tonne then, but dwindled to 60 U.S. dollars a tonne now. It means huge unrealized losses for steel mills and traders who betted on price hikes,” said Du Wei, an analyst on iron ore with Umetal.com.
Those unrealized losses for the 52.08 million tonnes of iron ore imported in March could be about 1 billion U.S. dollars, Du said.
Liang said iron ore prices were hinged to steel prices.
“Domestic steel prices have dropped and will further dwindle. Thus it’s inevitable for iron ore prices to go down,” Liang said.
Iron ore stockpiled at ports stood at 70 million tonnes in March, nearing a historic high, according to anonymous sources within the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters.
Due to declining iron ore prices, an increasing number of domestic iron ore mines are closing down, said Zhang Ye, deputy-general-manager of China National Minerals Co., Ltd.. No specific figures were available.
“About 90 percent of China’s iron ore mines are suffering from losses,” Du said. “Steel is a kind of product that could be recycled and thus its scarcity could not be exacerbated in the long term.”
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Chinese steel price recovery may be short lived
February 7, 2009
China Securities Journal reported that market participants are concerned that recent steel price recovery may be short lived since the real steel demand remains slack, although the price rally has extended for ten straight weeks supported by stimulus package and production cut.
As many mills have restarted production in light of price improvement, maybe an overreaction by speculative buyers, which would again put the steel price under downward pressure.
The demand plunge has yet to reverse, and recent price recovery is the result of larger scale of production cut than the demand reduction, which has restored the market balance for the short term. However, the construction activity especially housing market continues to shrink, while many companies have slashed the capital spending significantly for the New Year, which would all suppress the steel demand.
Mr Matao Bohai Securities analyst said down-stream demand may not be that healthy as indicated by the rebounding steel prices. Leading mills have raised up the offer price around Jan in response to the price improvement and they are eager to offset the heavy loss in past months. Meanwhile, trading houses are more willing to restock at the moment. Nevertheless, most are more bearish on long products outlook on back of limited capacity addition and infrastructure oriented stimulus package.
The stimulus package is expected to provide a real demand boost for long products. Therefore, long products price is estimated to held steady or edge upward in days to come.
The steel output grows 15.4% from the month before in December of this, long products output expands 21.8%, while flat products production merely rises 9.97%. Market insiders warn that swelling supply of long products could weigh on prices downward since most sheet producers can readily switch to longs production.
Source: China Securities Journal
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OMC reduces Indian chrome ore price for Q1 shipments
January 31, 2009
It is reported that Orissa Mining Corporation has reduced the price of Indian chrome ore for domestic sale to a large extent. The new price is applied to shipments in January to March 2009 quarter.
As per report, a typical high grade chrome ore produced in India has contained Cr2O3 48% to 49.99% and its price has been reduced to INR 4,976 per tonne, corresponding to approximately USD 96 per tonne, which has fallen to nearly half of the price for October to December 2008 quarter.
At all events, the higher prices of USD 700 to USD 800 per tonne had once prevailed in the international market, mainly in China. However, owing to the cutback of ferrochrome to be produced from chrome ore as implemented from October of 2008, the world demand for chrome ore has decreased to a large extent and, in order to cope with this aspect, price of Indian chrome ore for domestic sale has been urged to revise.
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Iron Ore Price May Decline By 50 % in 2009 in China
January 29, 2009
Iron ore contract prices may fall as much as 50 percent this year amid a slowdown in China, the world’s biggest consumer of the raw material, according to Australia’s richest woman and mining magnate Gina Rinehart.
“We’re hearing 30 percent, 40 percent, 50 percent discounts to last year’s contract price,” Rinehart, who controls closely held Hancock Prospecting Pty, said in an interview with Bloomberg Television. That compares with the average forecast of a 30 percent cut in a Bloomberg survey of 11 analysts last week.
Chinese steelmakers are likely to win their first cut in contract prices in seven years as a global recession curbs demand for commodities. Rinehart’s partner, Rio Tinto Group, the world’s second-biggest exporter of the ore, and Baosteel Group Corp. began talks this month to set prices from April 1, according to two company executives who asked not to be identified.
“The economy in China is very sad right now,” Rinehart said. China’s economy may rebound soon and “ultimately, prices will rise,” she said. Hancock isn’t party to the talks.
Hancock Prospecting is partner with Rio in the Hope Downs iron ore project in Western Australia. Hancock is also seeking to develop the Roy Hill iron ore mine in Western Australia.
Rio, BHP Billiton Ltd., and Brazil’s Cia. Vale do Rio Doce, which handle three-quarters of traded iron ore, sell the steelmaking material under long-term contracts to China’s 20 biggest mills and traders at agreed annual prices.
China may be asking for a price cut of between 40 percent and 45 percent, Macquarie Group Ltd. analysts led by London-based Jim Lennon said in a Jan. 12 report. UBS AG analysts have forecast a decline of 40 percent. A 30 percent cut would still be the second- highest price on record.
Source: China Steel Net.com
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