Iron ore market waiting for long-term contracts

SteelOrbis Shanghai Overall Chinese iron ore prices are stable with minor drops in some regions over the course of last week. Market players are waiting to see what will happen next. The restructuring work on mines is approaching to the end; therefore more and more mines in Tangshan region have resumed production, leading to an increase in iron ore supply. The iron ore prices in Tangshan slightly went down, while those in other regions are stable recently, and the prices in southwestern markets are firm. Both steelmakers and miners are waiting for the outcome of international iron ore price negotiation. The fourth round of international iron ore price negotiations which began last week has not come to a conclusion yet. The relevant people in China's Iron and Steel Association stated that the price negotiation might be prolonged to May unless reasonable prices are determined. Prolonging the negotiation is beneficial for Chinese steel mills. The investment in iron ore mining in China since 2003 has started to give fruits with an increase in iron ore supply, imposing more and more pressures on the market. The price trend in Tangshan is a sign of this. Meanwhile there are some rumors stating that China might get iron ore from North Korea. Furthermore, Indian iron miners and Chinese steel mills will discuss on making long-term contracts instead of spot sales during a conference to be held in China's Qingdao city during April 13-14. On the other hand, rumors stating that Indian government may restrict the iron ore export to China are against Chinese steel mills because India –being the second largest iron ore import source for China- plays a vital role in China's iron ore import supplies. However, the possibility of a restriction is slim.