Iron Ore Gaining On Supply Deficits
Iron ore prices are continuing to gain on weak supplies in the markets. In China imported iron ore prices kept on gaining. The 63.5% Indian fines hit $ 185-187 per tonne, testing 6-month highs.
Although overall demand is slow ahead of lunar New Year holidays, the prices are stable as the markets expect a rise in demand after spring holidays. Fundamentals are strong, making Iron ore stabilize even at higher prices. Latest report from Brazil showed that the Iron ore producing area Minas Gerais was hit by floods that would affect the exports. Australia is already facing devastating flood situation that is affecting the shipments.
The Pilbara region that is the major producer of Iron ore in Australia will be facing severe rainfall as per Met department reports. This will be appreciating the prices. The other major exporter of Iron ore was Australia that is already facing export bans by government. To meet the growing demand the Indian policymakers are likely to levy a comman tariff of 20% on Iron ore exports. The current export duty on iron ore fines is 5% and 15% for lumps.
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