Reuters reported that spot iron ore prices rose recently as Chinese steelmakers’ replenished inventories that have run low after a record pace of steel production until mid-May.
A drop in spot prices to two month lows last week encouraged mills in China, the world top iron ore consumer and to restock.
An iron ore trader in Rizhao city in China Shandong province said that "We expect the restocking to continue for the next two weeks. Iron ore prices are low, inventories are low and steel prices are good."
Traders said Indian ore with 63.5% iron content was quoted at USD 179 per tonne to USD 181 a tonne including freight up from USD 175 to USD 178 on Tuesday and market indications are for prices to be firm to stable in the next few weeks.
Traders said global miner BHP Billiton sold 80,000 tonnes of 61.2% grade iron ore fines at USD 171 a tonne and another 90,000 tonnes of 57.7% grade at USD 158 a tonne at a tender on Tuesday. The price for the higher grade fines was in line with spot market rates while the lower grade ore was USD 3 to USD 5 higher than readily available stocks at Chinese ports.
A trader in Shenzhen said "I think the Chinese will not be restocking too much iron ore because of the power shortages which may hit steel production and the tighter monetary policy. Also, steel demand usually slows during the summer when construction mostly stops because it becomes too hot to build anything."
China is struggling with its worst power shortages in seven years and has raised electricity prices for some users for the first time since 2009.
( Source: www.steelguru.com )