Iron ore spot prices in China have been edging up as the world's top three mining giants are hoarding to resist the China Iron & Steel Association's appeal to halt imports, the National Business Daily reported on Thursday.
Spot prices of Indian iron ore fines (63.5 percent Fe) had advanced to 1,240 -1,250 yuan ($181.7-$183.1) per ton by Wednesday, from 1,180 yuan per ton at the beginning of April, a gain of 60 to 70 yuan per ton within several days, according to Sun Ming, an analyst with Lange Steel Information Research Center.
Hou Zhiyun, director of Lange, told the newspaper that Australia's Rio Tinto and BHP Billiton and Vale of Brazil are taking advantage of their monopoly status to control iron ore supplies while China's imports of iron ore are also on the decline.
It is hard to do iron ore business now with the three monopolistic giant mines tightening supplies, and some domestic iron ore dealers have halted their business, said a person surnamed Yuan, who has long been in the iron ore business.
"Customers are everywhere, while iron ores are scarce", a source who took charge of a steel company told the paper.
Latest data from Lange show that 19 ports in China have 67.37 million tons of iron ores in stock, 155,000 tons less than last week.
Stocks were falling in almost every port, except Qingdao and Rizhao of east China's Shandong province, industry insiders said.
Dalian Port of northeast China's Liaoning province showed an obvious sign of declining, with 2.02 million tons of iron ore in stock, 330,000 tons less than last week, the paper said. Iron ore stock at Caofeidian Port of north China's Hebei province also decreased by 150,000 tons to 3.45 million tons this week.
Many industry insiders speculated that the world's top three mining companies' hoarding was a negotiating strategy for controlling iron ore prices.
In response to their monopoly move, the China Iron & Steel Association recently made an appeal to domestic steel mills and dealers for halting iron ore imports in the coming two months.
According to the newspaper, iron ore prices fluctuated less than 20 percent annually from 1981 to 2000. Prices gained more than 10 percent seven times, but years when prices gained and years when prices fell were basically even, it added.
The trend is quite clear that prices are headed to record highs, although negotiations are still ongoing and the final level for gaining has not been decided yet, analysts said.
