Asia Iron Ore-Prices surge on India tax hike, year-end buys
By Nick Trevethan
SINGAPORE, Jan 8 (Reuters) - Asian iron ore prices have risen by 20 percent in the past three weeks, bolstered by a rise in Indian export duties and steady buying by Chinese steelmakers.
The 5 percentage point rise in iron ore export taxes announced over the Christmas holiday sparked a surge in prices -- the strongest in a two-week period since early August -- and the rally continued as consumers stock up ahead of week-long Lunar New Year holidays.
"Demand is very strong. It looks like year-end buying before the Chinese new year," said Shivanand Salgaocar of V.M. Salgaocar & Brothers Pvt. Ltd, a large miner and exporter in the country's western state of
"Since the time the government imposed the duty, the market has gone crazy," said Raja Dhupar, Vice President at Yazdani International Pvt Ltd, an exporter based in the eastern state of Orissa.
"It's not just the traders but even the Chinese steel mills who have started buying." Traders said some Indian exporters were absorbing the duty while others were asking buyers to pay half the increase
Also bolstering prices, supplies have been constrained in the eastern state of Orissa and the southern state of Karnataka, owing to a government crackdown on illegal mining in the former and fewer transport permits.
The Steel Index's iron ore benchmark IO62-CNI=SI hit a lifetime high of $124.80 a tonne this week, up from $104.20 on Dec. 15.
Inventories of imported iron ore at
Traders have complained that the supply of imported ores from
And based on shipping data those complaints also appeared groundless -- spot iron ore fixtures to
"Exports between April and November were at 64.8 million tonnes against 52.6 million tonnes a year ago", the Federation of Indian Mineral Industries said in a statement.
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