The recent decline in prices of imported iron ore into China appears to have paused, a number of sources said, agreeing that the market had stabilized.
Iron ore spot prices for 63.5% are still at $64-67/dmt CFR north China and 62% at $57-58/dmt CFR north China. Platts 62% iron ore fines price stayed at $57-58/dmt CFR north China. There was however still very little spot trade, confirmed by the fact that freight rates continue to decrease. Panamaxes from Brazil dropped below $11/wmt to $10.6/wmt, and capes from Australia are down to $4.9-5/wmt. Indian rates for handysize and panamaxes were steady at $6-8/wmt. "I expect Indian rates to slide a bit as both Australian and Brazilian rates have," an Indian trading source commented. In spite of high stock levels at Chinese ports, reported to be still above the 70 million mt mark, sources said that some mills were choosing to purchase imported spot material instead. As sellers with material in the ports were not willing to lower prices right now for material bought at higher prices than those seen currently, buyers have to pay cash to buy these stocks. Whereas credit lines are available for imported material. Following the announcement Friday that the Indian government has changed the export duty on all Fe grades for fines iron ore exported out of India to a flat 200 rupees from 15%, sources said there was a small advantage to the high Fe grades but that the change would make little difference to the lower grades. The two hundred rupees charge is irrespective of Fe content. "At current price levels it does not matter much," one Indian supplier said. "It results in a $2-3/dmt difference, where as previously [when iron ore spot prices were higher] it was more like $10/dmt," an Australian trading source said, referring to the current low spot iron ore prices.
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