Iron ore export prices dip as China reduces orders

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Jun 12: Iron ore export prices fell as much as 19% after Chinese steelmakers pared purchases to bring down cash prices.

Iron ore for immediate delivery declined to $125 a metric tonne from $155 a tonne at the start of the year, said RK Sharma, secretary general of the Federation of Indian Mineral Industries, said.

BHP Billiton and Rio Tinto Group, which accounts for half of Asia’s iron ore sales, are asking Asian steelmakers to pay more for contract iron ore because of higher cash prices. China, the world’s largest consumer of the material, asked its steelmakers to stop stockpiling iron ore as price talks continue.

“This is China’s way of putting pressure to lower prices globally,” Sharma said. The Asian nation is “lowering purchases from India because Chinese companies are using their reserves.”

China accounts for more than 50% of India’s exports of the material. Brazil’s Cia Vale do Rio Doce, the largest iron ore exporter, won a price increase of between 65% and 71% from steelmakers starting April 1. Rio and BHP, the second and third-largest suppliers, want a bigger increase.