February 20, 2012: Spot iron ore prices dropped further as buyers held purchases in anticipation of further drop in prices, market sources told ISMW.
Quotes for Indian fines Fe 63.5/63 dropped to $143/ton i.e. down by $1-2/ton. Sources said if physical demand for steel comes back then buyers will start buying iron ore.
Meanwhile, there are reports that the Chinese government has raised a resource tax on iron ore in a move aimed at conserving resources and curbing pollution.
The tax rate for iron ore has been raised to 80% from the previous rate of 60%. Higher resource taxes on iron ore will add an average of around 10 yuan/ton to the cost of domestic concentrate, industry sources said.
The increased cost of domestic iron ore may encourage steel mills in China to go for more imports and this may turn out to be slightly positive for the iron ore import market which has been lull since the re-opening of market post Chinese New Year.
Meanwhile, NMDC Ltd had cut its price of iron-ore fines for the January-March period by 23% from the past quarter to Rs 2,590/ton and that for lumps by 3% on to Rs 4,960/ton.
Source: ISMW