* Iron ore quotes at $64-$70/tonne FOB, up from last week
* China sucks up local supply, big exporter says sold out * Traders expect higher prices, speculate $100 with freight
By Ruchira Singh
MUMBAI, July 16 (Reuters) – India’s iron ore prices were firmer this week as heavy Chinese buying continued, and shrinking local supplies promise more gains ahead, exporters said on Thursday.
“Demand is good. It is better than last week. There is some shortage in supplies. It does happen every year at this time to some extent,” said Gaurav Atha, managing partner at K.N. Ram & Co, a miner and exporter in east India.
Atha said supplies were hit not just by China’s heavy buying, but also by monsoon rains stopping shipment of iron ore fines from the western state of Goa, and a strike in western ports.
India is China’s third biggest supplier of iron ore, but has assumed greater importance lately owing to inconclusive contract talks and a dispute between Chinese steel mills and Australian iron ore suppliers. [ID:nSP505017]. Exporters said China would buy more from India as long as these talks remain deadlocked, even if it meant paying higher prices.
“We are all sold out up to Aug. 15. The hpw market is going up, so I don’t even want to sell now,” said a dealer at a large east India based miner.
The dealer said he had last done three deals on Friday for 63.5 grade at $88 and $89 per tonne with freight and 64.5 grade for $93.5. All were higher by a few dollars compared to the previous week, he said.
Atha of K.N. Ram said he sold iron ore at $64 a tonne FOB last week and could get more this week, and a trading company in east India said it had sold at $70 FOB this week.
Deutsche Bank’s one month iron ore swaps were quoted at $87, higher than last week’s $81.75.
India’s exporters said they were confident prices may climb more.
The east India based dealer said there was talk in the market of iron ore prices at $100 in the near future, including the cost of freight.
“People are already talking $93, $94… they are saying it can reach $100,” the dealer said.
Freight rates .BAWB .BATB were firmer this week, reflecting higher Chinese demand. [ID:nLF318288].
For a graphic on Indian iron ore exports, click: here (Editing by Michael Urquhart)
As published on http://in.reuters.com/article/2009/07/16/asia-ironore-idINBOM50406320090716