Iron ore prices have surged to near a 1½-year high after India, the world's third largest exporter, slapped an export tax on the commodity used to produce steel.
The imposition of the 5 per cent export duty over Christmas, combined with strong global demand and low domestic production in China, have pushed iron ore prices up almost 30 per cent in the past month, traders and brokers said.
The cost of the benchmark Australian ore – 62 per cent iron content – rose yesterday to $124.80 a tonne, including freight, according to swaps data from the Singapore Exchange. It is the highest level since September 2008.
“The Indian export tax has contributed to tighten the market,” said Michael Gaylard, an iron ore broker at Freight Investors Services in London.
Freight Investors Services驻伦敦铁矿石经纪商迈克尔•盖拉德(Michael Gaylard)表示：“印度征收出口关税，令市场吃紧。”
The introduction of the export duty also highlights how iron ore, a commodity that in the past almost never attracted attention as prices were stable and supplies were considered abundant, is slowly becoming a sensitive geopolitical issue.
Jim Lennon, a commodities analyst at Macquarie in London, said India wanted to discourage iron ore exports and protect supplies for its own steel industry with the tax.
Some analysts believe that the steel-intensive urbanisation of emerging countries means that iron ore is now more integral to the global economy than any other commodity, with the exception of crude oil.
China is the world's largest importer of iron ore and Beijing is very sensitive to the cost of the mineral. India supplies about a fifth of Beijing's overseas purchases.
The rally in ore prices comes as miners Vale of Brazil, Rio Tinto and BHP Billiton and global steelmakers start their price negotiations for the 2010-11 contracts.
在铁矿石价格飙升之际，巴西淡水河谷(Vale)、力拓(Rio Tinto)以及必和必拓(BHP Billiton)等矿业企业正同各国钢铁公司启动2010-11年铁矿石合约价格谈判。
Chinese and Japanese steelmakers have demanded a record 40 per cent cut in iron ore prices in annual benchmark pricing negotiations, but are facing resistance from mining groups.
Iron ore miners plan to postpone any agreement in annual contract negotiations with steelmakers until as late as the summer, betting that demand and therefore market prices will im