Iron ore spot price shipped to China rose 21.5% in JulyLondon (Platts)--31Jul2009
The price of imported iron ore sold spot into China, rose 21.5% in July. Platts IODEX 62% Fe content price assessment for the steel making raw material increased by $17 in total to close the month at $96/dry mt CFR North China. The increase on a monthly average basis from June's $73.06 was 16.51% with July's monthly average hitting $85.12/dmt. This is down 51% year-on-year, however, as the monthly average for July 2008 was $173.23/dmt.
A number of drivers behind this months increase in the spot price were identified by sources and market participants with which Platts engages daily to produce the assessments and market commentary. The main driver being the shortage of supply.
Australian spot supplies started to dwindle in June, and appeared to vanish in July. Scheduling material to fulfill long term contract customers' requirements and a resumption of shipments to other Asian markets, were both cited as reasons for the absence of supply by the major Australia miners.
India remains China's main supplier of spot volumes, but material availability has been hampered by port congestion and seasonally bad weather.
On the demand side, the recovery of steel prices and production volumes in China has continued to fuel demand for steel making raw materials.
Many domestic sources of iron ore concentrate closed in 2008 due to poor returns, resulting in a growing Chinese dependence on imported material to satisfy increasing demand.
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