India almost doubles long-term iron ore contract prices for China

Following the recent price hike in export quotations of Indian iron ore to Japanese and South Korean steelmakers, the contract prices of Indian iron ore for Chinese steel producers have also increased by almost 100 percent as compared to last year's prices. However, since most Chinese mills usually purchase Indian iron ore in the spot market instead of concluding long-term (quarterly) contracts with Indian iron ore suppliers, the changes in the contract prices may have a limited influence on China's import iron ore market. Meanwhile, the downward trend in spot ore prices may continue in the coming period.
 
India's state-owned National Minerals Development Corporation (NMDC), the country's largest producer and exporter of iron ore, has lately followed the example of the global mining giants in switching to quarterly contracts, signing agreements with Japanese and South Korean steelmakers to supply iron ore at nearly double the price as compared to last year's rates. Accordingly, NMDC, Asia's third largest iron ore miner, will sell its ore at $139/mt FOB for iron ore lumps and at $123/mt FOB for iron ore fines.
 
Subsequently, Chinese steel producers also received notification of the same increases in quarterly iron ore prices.