Prices for iron ore in the world market have reached an almost 10-year high

Steel prices in the country may be subject to some growth after the prices for iron ore in the world market jumped to almost 10-year highs.

Mining.com website, citing Fastmarkets MB, reported that a control 62 percent fine iron ore shipped to North China was selling at $ 175.05 a tonne and freight on Thursday.

The rates were nearly five percent higher compared to the Feb 17 trade.

The spike in prices was associated with China’s return to the global market after the Lunar New Year.

Iron ore with an iron grade of 63.5%, which is priced at $ 169.50, is up nearly seven percent since the beginning of the year; while ore with an iron content of 62% increased by 5.61%.

The increase in iron ore production has boosted steel prices by more than four percent in China, the main producer of the commodity.

Hot rolled coil futures in China hit a two-month high of 4,402 yuan (£ 49,381) per tonne in hopes of picking up demand after the Chinese New Year, according to the Trading Economics website.

Indian Steel Prices

The rise in global iron ore prices occurred immediately after the correction in steel prices in India.

“From June to December, steel prices rose from £ 32,000 per tonne to £ 55,000. After that there was a correction, ”said the head of one of the leading steel companies. He spoke on condition of anonymity.

Steel prices in India rose 55% from June to December last year. This led the Minister of Road Transport and Roads, Nitin Gadkari, to write to Prime Minister Narendra Modi expressing concern about rising steel prices.

Its main problem was that steel prices rose four times during the October-December quarter, which could lead to higher costs for infrastructure projects.

Union Finance Minister Nirmala Sitharaman intervened to help steel users and MSMEs (micro, small and medium enterprises) submit to the budget submitted to parliament on 1 February.

“We are consistently reducing the customs duty to 7.5% for semi-finished products, flat and long products from unalloyed, alloyed and stainless steels. To help metal processors, mainly MSMEs, I am exempting from duty on steel scrap until March 31, 2022, ”she said in her proposal.

In addition, the Center canceled anti-dumping and countervailing duties on some types of metal products until September 30, 2021.

“In fact, there was a 20% correction in steel prices. Thereafter, prices were adjusted higher and now the overall adjustment is 15 percent, ”the executive said, adding that prices were still considered high.

The price of Indian HR steel is currently around 47,800–48,000 won per tonne.

An industry spokesman, who asked not to be identified, said steel prices were halted after a clamor and scream broke out last year.

“But iron ore and coal are two of the main raw materials for the steel sector. The jump in steel prices in India will have some impact, ”the official said.

He said July-September and October-December were good for metallurgical companies as supply and demand matched. The demand from the infrastructure sector was good.

Last year, producers have raised steel prices since June, largely as demand rebounded 90 percent from pre-COVID levels.

During the nationwide lockdown, especially between March and June, capacity utilization in the steel sector was 25 percent, forcing companies to seek a way out through price surges.

In addition, supplies of iron ore, the main raw material for steel companies, have been hampered by the closure of small mines during a lockdown due to the Covid-19 coronavirus.

The official said steel companies would have to enter into long-term contracts to purchase iron ore rather than buying it locally. “Those who signed long-term contracts did not express concern. You sign a contract, and then, if prices are low on the spot market, buy from him, ”he said.

“Rising iron ore prices could have at least a marginal impact on steel,” he said.

The steel chief said prices could decline over the next few months as the additional liquidity in the market, pumped up through various stimulus schemes by many countries, could be sucked out.

“Once the excess liquidity is eliminated, prices will return to real value,” he said.

However, an industry spokesman said this is mainly market sentiment and the industry should perform well in the future.

China Purchase

The current surge in iron prices follows a decline in one hundred

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