Iron ore price blasts to 3-month high

Chinese language steel Raymond mill is humming and quickly depleting domestic iron ore mines currently grappling with low grades face difficult new environment rules from Beijing converting into surging demand for imports. The buying price of iron ore jumped to a three-month at the top of Tuesday on robust Chinese economic exercise data showing continued strong growth particularly in construction along with a rebound for its steel industry. The actual benchmark CFR import price of 62% metal ore fines at China's Tianjin flower 1% to $138. 20 a tonne on Tuesday a level last seen at the start of September according to data supplied by SteelIndex.

While China's official raymond mill Purchasing Managers' Index indicated overall economic activity slowed somewhat from October's 14-month high, the sub-index for construction was buoyed with a stronger property market. A figure above 50 shows expansion and also the building index climbed to 63. 5 through 62. 0 according to the China Federation of Logistics and Purchasing as the steel industry index bounced back in order to 49 in November from 47. 5 within October. While steel activity remained within contraction mode last month new foreign trade orders for Chinese steelmakers jumped in order to 56 from 49. 2 in Oct, showing much stronger growth down the actual line.

China buys roughly 70% from the world's seaborne iron ore trade that is expected to top 1. 1 billion tonnes from the steelmaking ingredient this year. Cargoes in the world's largest exporters in Brazil, Australia and South Africa happen to be edging out domestic supply, with imports into China reaching an archive high of 74. 6 million tonnes within October. Chinese iron ore miners have a problem with low grades and high costs and domestic supply is likely to reduce further after Beijing instituted stricter environmental standards for that highly fragmented industry in November.

One third of additional iron ore production by 2020 will "simply replace depleted mines" World number one producer of iron ore Vale at an investors conference held in New York yesterday said concerns about a flood of new supply coming on stream are overblown and that one third of additional iron ore production by 2020 will "simply replace depleted mines". The Wall Street Journal reports Vale is predicting global steel production to develop 23% between 2012 and 2020.