India's iron ore prices were steady from last week, buoyed by slow but continuous demand as Chinese traders kept feeding local steel mills despite warnings of a steel glut.
"Demand is good. Almost all steel mills in northern China, which used to consume domestically produced iron ore, are buying ... imported ore accounts for more than 80 percent of their total demand now," said a senior manager at a state-owned trading house in Beijing.
China's iron ore port stocks fell by 2 percent this week, reflecting good demand from the steel industry, which is the world's biggest.
China's purchases come against the backdrop of its long-standing talks with Australian and Brazilian iron ore suppliers over setting annual benchmark prices and warnings that its steel industry was oversupplied. Indian traders and a trade body head said Chinese demand was just as good as last week, keeping prices well supported.
"The market is on the positive side. Prices asked by sellers are $67-$68 a tonne (with freight) and someone has sold at that rate," said one east India-based miner and exporter.
The Federation of Indian Mineral Industries (FIMI) quoted benchmark prices at $52-$54 FOB, on par with a week earlier but higher than $45-$46 in early May.
Deutsche Bank's one-month iron ore swaps were quoted at $68, firmer than end-April's $64.75.
The impending closure of iron ore fines exports from Goa port in west India due to the monsoon, has pressured other ports. An increase in stocks waiting to be shipped out was seen especially at Paradip port in the east.
"Goa port was supposed to close on Wednesday but because the weather is fine, it is continuing to load," said a miner and exporter in Goa. "But the season is as good as over."
India's annual south westerly monsoon is expected to hit the country's south-western coast in the next few days, inching its way up to Goa, halting exports of iron ore fines till August-September.
Other ports felt the effects of the imminent port closure. A trader in the eastern state of Orissa said Paradip and Haldia ports were slowing down as well with vessels having to wait for up to seven days.
"I have to look after port planning and logistics so I am not selling this week," the east India miner said. "We are fully sold till June first week."
Source: Reuters
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