The head of the world's biggest fleet of bulk carriers for shipping iron ore and coal, Mitsui OSK Lines Ltd, has said that he sees a recovery in the Chinese steel market, which would help sea-borne trade of raw materials.
Mr Masafumi Yasuoka said that demand for steel is recovering in China due to the government's economic stimulus package.
He said that “It is prompting small steel mills to increase spot purchases of iron ore from Brazil's Vale and Australia's BHP.”
He added that "Chinese mills need to buy more iron ore, due to the economic package. That in turn has made some iron ore miners bullish in price talks on iron ore with mills.”
However expects China's big steel mills such as Baosteel to start buying iron ore after the 2009/10 contract price is set, pushing up freight rates further after April.
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