By IB Times Staff Reporter: Subscribe to IB's RSS feed
August 31, 2010 9:45 AM EDT
Faced with rising iron ore production in China and slowing steel demand, global miners are on route to slashing iron ore prices by around 10 percent in October.
According to a report in China Daily on Tuesday, Brazil's Vale, the world's biggest iron ore producer, would cut iron ore prices by 10 percent in October.
The Brazilian company's prices have surged 170 percent this year. It announced a raise in third-quarter iron ore prices to $144 a metric ton in May, or 35 percent from a quarter earlier.
Iron ore imports by China, the fastest growing major economy in the world, dropped for the third straight month to 47.2 million tons in June, while spot prices have dropped to about $122 per ton after peaking at $185 per ton in April.
A report by China Iron & Steel Association (CISA) earlier in the month showed that the country's iron ore imports rose 4 percent year-on-year in the first half of this year. However, this was offset by the steep rise in domestic iron ore production. Domestic ore output rose 28 percent year-on-year to 485 million tons in the same period, figures showed.
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Citing a Bloomberg report, the China Daily said Rio Tinto Group and BHP Billiton Ltd also may cut iron ore prices by 11 percent for the fourth-quarter.
Iron ore prices from the two mines may drop to $129 a metric ton in the fourth quarter of this year, down from $145.30 in the third quarter, the report said.
Baosteel, the country's leading steel maker, is still negotiating with global iron ore producers on the price of iron ore in the fourth quarter, Reuters has reported.
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