steel prices on the increase... I wonder how much this will affect met coal? (sorry about the format)
Cheers
B4
Iron Ore
Spot iron ore prices continue to rally on Tuesday, touching their highest level in
almost two months in response to both stronger steel prices and post-holiday restocking of raw materials by Chinese steel mills.
According to data from The Steel Index, Chinese steel mills are down to approximately two weeks of iron ore on hand. This is
considered their bare minimum, as ore shipments take approximately two weeks in being delivered. "Overall sentiment has been
a lot better with the Chinese returning [to the market] this week," reports Reuters, quoting said Jamie Pearce, head of iron ore
brokering at SSY Futures. "We have seen Chinese mills bidding high numbers on physicals to try and secure cargoes," said
Pearce, adding, "The Chinese were also the main buyers of iron ore forward swaps so far this week. We have the resources they
need, and they need a lot of resources." A Wall Street analyst noted, "Letting ore levels get too low exposes them to real panic
buying and tremendous prices in the future, as well as possible production interruptions, which are not good for the mills.
Maintaining normal ore buying rates will allow the price to drift back up to the equilibrium point defined by the cost curve."
Also adding the spike in iron ore prices is news from the Indian state of Goa, where the Supreme Court has order a halt to all
iron ore mining and transportation due to a royalty dispute with VALE (VALE). Companies with iron ore exposure include: Labrador Iron Ore Royalty Company (LIF) and Champion Minerals (CHM).