SteelOrbis Shanghai Influenced by the agreements between CVRD and some European steel mills to hike the
iron ore prices by 19 percent, the imported ore prices in the Chinese market slightly increased towards in the end of last week. Furthermore, the commercial activity of low iron-content ore has become brisker, while domestic ore prices remained stable with better sales figure. Early last week, CVRD and Thyssenkrupp signed agreement on
iron ore prices for 2006 fiscal year. In the agreement, the increase range for fine ore was 19 percent, while the price of pellet was down 3 percent. Later, some other Asian and European steelmakers also followed Thyssenkrupp's move. Influenced by these movements, the imported ore prices slightly went up in
China. However, there were not many deals concluded, and the inventory is continuing to increase. On May 12, the total
iron ore inventory in
China's twenty-three major ports was at 42.1 million metric tons, up 2.5 million metric tons compared with the level before the holiday in May. Among the total inventory, about 9.6 million metric tons are Indian spot
trading ore, up 200,000 metric tons than that before May Day. According to
China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC), the FOB price of 63.5-percent Indian fine ore is at $51-52/mt level, which is $1/mt lower compared to the end of April, and the CIF price is at $67-68/mt, $2/mt lower. Spot
trading ore cumulated at the ports due to weak amount of deals. At present, many steel mills have reached agreements with CVRD, giving
China Iron and Steel Association more pressure. Chinese steel mills are expected to accept a similar or slightly lower price increase.