in response to Re: China iron ore by tectol

posted on Apr 14, 09 11:23PM

(Comment . : When i said China acted as of one mind i might have slightly exagerated Hi Hi ! After all they're about 1,3 billion people out there )

China's iron ore imports topped 52.08 million tons in March, setting a monthly record high. It beat the last record which was just set in February. That's when the country imported 46.74 million tons of iron ore.

In the first quarter, China imported a total of 130 million tons of iron ore. In 2008, iron ore imports totaled 440 million tons.

"The imports in March mostly came from orders made in February. Iron ore was priced at $80 a ton then, but dwindled to $60 a ton now. It means huge unrealized losses for steel mills and traders who betted on price hikes," said Du Wei, an analyst on iron ore with Umetal.com.

Those unrealized losses for the 52.08 million tons of iron ore imported in March could be about $1 billion, Du said.

Liang said iron ore prices were hinged to steel prices.

"Domestic steel prices have dropped and will further dwindle. Thus it's inevitable for iron ore prices to go down," Liang said.

Iron ore stockpiled at ports stood at 70 million tons in March, nearing a historic high,

according to anonymous sources within the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters.

Due to declining iron ore prices, an increasing number of domestic iron ore mines are closing down, said Zhang Ye, deputy-general-manager of China National Minerals Co Ltd. No specific figures were available.

"About 90 percent of China's iron ore mines are suffering from losses," Du said. "Steel is a kind of product that could be recycled and thus its scarcity could not be exacerbated in the long term."

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China steelmakers want ore at '07 price level

(Agencies)

Updated: 2009-03-19 14:31

( This is the kind of action i refer to when i say they act as with one mind but nothing's perfect )

China Iron and Steel Association (CISA) warned China's steel makers not to accept the index pricing that will be proposed by suppliers in 2009 iron ore negotiations, the Shanghai Securities News reported on Dec 25.

One of the largest iron ore suppliers BHP Billiton recently suggested replacing the current fixed-price contract with an index-based pricing, which adjusts prices on a more regular basis or based on spot market conditions.

Shan Shanghua, secretary general of CISA, was quoted by the newspaper as warning Baosteel, which is leading Chinese steel makers' negotiation with major international iron ore suppliers, not to accept such a pricing scheme and furthermore, that mills would be deprived of import licenses if they do so.

Chinese mills have suffered from skyrocketing prices in iron ore imports in recent years, but the prices are expected to drop in the long-term contract for 2009 as demand decreases.

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Now one last ref. for the road from one iron ore producer from Brazil stating what he foresees in terms of futre demand in China for 09

Vale sees stable 2009 iron ore exports to China

(Agencies)
Updated: 2009-03-17 11:03

Brazilian miner Vale's iron ore exports to China should hold steady for the rest of the year, Chief Executive Roger Agnelli said Monday.

The CEO of the world's largest iron ore miner said some small- and medium-sized Chinese steel mills had begun producing again and buying iron ore.

But large steel mills were not yet buying, he said.

"So, my perception is that the level that we are running today, the level of activity that we have today, the volume that we are exporting to China today, will stay stable until the end of the year,"

Agnelli said on the sidelines of a conference on Brazil.

Vale announced in mid-February that it expected to ship a record 30 million tons of iron ore to China in the first quarter of 2009.

The mining giant has been adding new customers among steel producers in China and Agnelli said he expects that trend to continue.

"We have signed a lot of contracts with small and medium-sized Chinese mills. I am positive about China. I'm really positive. I think they are adjusting their growth rate. But they are still in a growth scenario," he said.

Also in February, Jose Carlos Martins, director of ferrous metals at Vale, said new clients in China had signed contractual supply agreements with Vale to purchase 50 million tons annually.

On Monday, Agnelli explained that Chinese mills had bought a lot of iron ore in the beginning of 2008 thinking the market would continue growing at a fast pace. Spot iron ore prices peaked around that time.

By September, however, demand from China had completely stopped. Since then, Chinese mills have been working off stockpiles, which, he said, led to the latest pick up in iron ore purchases.

For 2009, he said, "I think China will face a slight decrease in production over the year compared with 2008".

Vale is currently negotiating with Chinese steel producers over annual iron ore contract terms. Last fall, many analysts expected the contracts would settle with huge price declines after the steel sector annnounced sharp production cuts.

The recent resumption of iron ore sales to Chinese steel mills caused many observers to reduce their projected price drops for the iron ore contracts.

Agnelli would not be drawn when asked where he thought term contracts would settle.

"We are still talking. We are discussing. Let's be patient." he said.

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NOW WHERE DOES THE GULL THAT SEEKS KNOWLEDGE FOR THE SAKE OF KNOWLEDGE GOES ?

AND WHERE DOES THE ONE THAT SEEKS KNOWLEDGE FOR THE SAKE OF TRAVELING GOES ?

China's steel industry is seeking a reduction in iron ore prices to levels seen two years ago, a top executive of the country's steel industry association said on Thursday, as demand eases in the global recession.

Iron ore miners such as Brazil's Vale, BHP Billiton Ltd and Rio Tinto Ltd/Plc are currently negotiating with Chinese steel producers over annual iron ore contract terms.

Shan Shanghua, secretary general of the China Iron and Steel Association, also told reporters on the sidelines of an industry conference that Baosteel Group, China's largest steelmaker and parent of listed Baoshan Iron and Steel, was negotiating iron ore supplies for the entire China steel industry, which should bolster its bargaining power.

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China's steel makers warned not to accept index pricing

By Jiang Wei (chinadaily.com.cn)
Updated: 2008-12-25 11:57

China imports record volume of iron ore in March

(Xinhua)
Updated: 2009-04-14 16:48

China's steel industry overestimated the country's demand for iron ore and as a result imported a record high amount of the material in March.

A surge of domestic steel output and price increases in the beginning of 2009 raised market expectations. Many domestic steel mills and traders increased orders for iron ore in February and March as they anticipated demand would continue growing, said Liang Shuhe, deputy-director with the Foreign Trade Department of the Ministry of Commerce, at an industry conference in the port city of Tianjin Monday.