Iron Ore Prices and Steel Product Price Updates

With the acute shortage in the supply of Iron Ore and power crisis the prices of Sponge iron has gone up in India. Thought the prices of Iron Ore are falling sharply in the international market, the acute shortage of supplies of iron ore to the domestic sponge iron industry has driven the prices and affected the production. The sponge iron prices in India, increased by 2.6% WoW to INR 23,700.

The Prices of Iron Ore of origin India, which is regular demand from China, decreased sharply by 6% to US$ 165/Mt, almost down by US$ 33 compare to its peak trading in the month of Feb 2011. This was the result of major back off by the investors in the metal commodity and global sell off in bullion. The negative sentiments across the world also kept the investors cautious.

The prices of the Indian Long Steel have increased by 3%-6% and the flat product prices rose by 1%. This upward trend may be due to the acute shortage of iron ore, power crisis and high sponge iron rates.  In comparison to the prices of steel in the global market, the Indian steel prices are up. The steel in China declined by 4%, Europe dip by 0.5%, Middle East by 1.7% and the prices of steel remained stable in Turkey and Russia.

There was a sharp selling recorded in Steel long products on NCDEX, despite of lower circuits. In Oct 2011 the prices of steel long product was at its peat at INR 31,380 per metric ton, and dived down at INR.27550 per metric ton this week. This fall was around 12% comparing to the last four sessions.

The buyers from Chinese Market for Iron Ore kept low in purchasing and finalizing the fresh orders. Some of the small mills in China have stopped their production. Other steel mills have gone for maintenance for weeks to 2 month or more. This can be a major step is avoiding the production till the demand in steel improves and the prices of iron ore drops further.

Why Iron Ore Prices falling ?

The market of iron ore seems to be turning downward and most of the traders are taking out the conclusion that the iron ore market is really going down due to fall in the steel prices in global market.
The new that  Brazil miners sold iron ore to China for much lower prices than the latest current prices also supported the price fall. But in reality, the market is on its higher side in the starting of this year because the Chinese Government issue package of 4 trillion Yuan (US$ 613bn) for the period of 2 years.
Most of the mining giants in Brazil are using their own price index for supplying iron ore to China. This helps them to improve their own market shares by taking the advantage of market price.
Most of the Brazilian miners are interested in increasing their sales of iron ore to China by locating their distributors in Asia. The distance between Brazil and China also playa import role in price flexibility.
Besides falling demand on steel in global market, the mining giants are negotiating the prices to increase their sales and improve their market shares.
If one checks the pricing of iron ore, it’s still on the higher side comparing last twenty months. The other reason could be the mood of the commodity traders.
It is expected that the prices of Iron Ore may see the lowest of US$ 130 by the end of this year. This is pure prediction as more supportive factors are still present in the market which states the price may go up.
The rising trend in the commodity market will soon resume if the European crisis doesn’t goes out of control and China doesn’t takes any hash step in importing iron ore.
The China economy is expecting growth rate of around 7 percent annually as per their 12th five year plan and the steel industry in China is big and the direct source for Governments income and employment. The Hunger for resources by the Asia’s Giant is not temporary and it will drive the demand of minerals and energy on long term basis.
Most of the investors backed off due to economical crisis which resulted as fall in the production of key commodities like iron ore, metallurgical coal and copper.

Price Updates of Indian Iron Ore and Fall in exports

The Prices of Indian Iron Ore has dropped by 12% to 14% in the international market. The high grade iron ore of Fe 63.5% are not at the level of USD 168 per metric ton and the low grade iron ore of Fe 54% is around USD 98 per metric ton.
It is expected the high grade iron ore will further fall to the price level of USD 150-160 per metric ton with the coming month. This down fall in the prices is due to the global financial turmoil.
If the global financial crisis stabilizes, then there is chance of the price to go up for the Indian origin iron ore. Now most of the mills in China are attracted to the iron ore of South Africa and Chile origins. They have entered into long term ventures with the miners in these countries.
Today, Indian Iron Ore has 27% of market share in ChineseMarket.  On the other side, the exports from India are also down due to shortage of supplies from the State of Goa, Karnataka, Jharkhand and Orissa. The exports may fall to 70 million metric tons from the average exports of 98.5 million metric tons this year.

Iron Ore Prices, Supplies and Market Updates

The Prices of Iron Ore dropping which is expected to be triggered by the bullion sell offs and overall negative sentiments for the commodities.
The prices of Iron Ore have fallen by 6% by last week. The reduced demand in the steel demand and the financial turmoil around the world is keeping the Chinese steel makers and Traders away from the fresh purchases.  They are expecting further drop in the prices.
The sharp drop in the steel rebars prices in the international market and recent crash in the ore prices have made the traders to offer less prices for their products to reduce their losses.
The high Grades of Iron Ore prices have seen a nose dive. The effect on the prices of low grades iron ore is less in comparison to high grade prices. The fresh market shows the price of 63.5% /63 Grade iron ore deals at US$ 178/MT CFR China.
The other grades were trading at much lower from last week. The low grade of  54/53% was at its lower of US$ 104 CNF China and the grade of Fe 59/58% iron ore dealing at US$ 138/MT CFR China.

Iron Ore Prices and Market News, Oct 5th 2011

The Iron Ore prices have slipped in past few days for almost 11% in the world market. Presently its trading around US$ 173/MT which was in its peak this year at US$ 192/MT in Feb.
The prices are expected to fall further to US$ 160/MT which will be around 8% in the coming days. It may be possible that the natural condition like weather and delay in supplies can push the prices again to its peak but almost in regular supply base the prices are expected to fall further.
The rise in the price of Iron Ore this year in Feb was due to the increase in the crude steel productions and along with the rainfalls in Australia and Brazil.
The ban of iron ore supply from India’s Karnataka state also has a great impact on the prices of iron ore. The China’s own domestic supply of iron ore have increased to 23%. The production of iron ore from Australia and Brazil may increase in coming days as now the climatic problems are over.
Some miners are also expecting that with the increase in domestic iron ore production in China, they supply can be study at US$ 86/Mt by 2016 for long term supplies. The prices above US$ 130/Mt will be supported only by the high cost producers in China and India.