Japan Iron Ore Quarterly Price to Hit First Rise in July-September

Japanese integrated steel makers’ iron ore purchase price is likely to increase for July-September from April-June, which is the first increase in 5 quarters. The international spot market price decreases recently but the averaged price in March-May would be around 5% higher than December 2011 to February 2012. The price keeps high level despite of steel price slump due of high cost for Chinese iron ore and strong import demand from China.

Platts reports the spot price is around CIF US$ 134 per tonne for Indian fine ore with 62% Fe for Chinese buyers. The price is lower than US$ 150 level in April. With the price level through May end, the averaged price in March-May would be near US$ 145.

Japanese industry sources indicate their purchase price would be around FOB 136 per tonne for July-September based on the averaged spot price in March-May. The FOB price is higher than US$ 130 in April-June but the price is 20% lower than July-September 2011 level.

Chinese iron ore import decreased by 8.3% to 57.69 million tonnes in April from March, which decreased to less than 60 million tonnes for the first time in 3 months. The monthly volume in April was slightly higher than monthly averaged in 2011. The import increased by 6.5% to 244.6 million tonnes in January-April from same period of 2011. Chinese iron ore demand is still strong when Chinese daily raw steel output renewed record in April.

Chinese buyers’ appetite gets slow recently due to decreasing Chinese steel market price. However, Chinese buyers could increase iron ore import depending on the international price due to high cost and limited availability of domestic iron ore. International iron ore market is balanced but the price could increase depending on Chinese move.