Bloomberg reported that the cost of iron ore shipped to China exceeded the average price of locally mined supplies for the first time in 5 months, ending a price arbitrage that helped push November imports to the second biggest on record.
According to data compiled from Antaike Information Development prices, the average price of ore of a similar quality mined in China averaged USD 121.60 per tonne on December 10th, the last day data was provided. On Monday imported prices rose above the cost of the locally produced steel-making ingredient for the first time since July 11th.
Mr RS Platou markets AS an Oslo based investment bank in an e-mailed report said that “There is no workable arbitrage. Brazil exports have been particularly quiet in the last few weeks.”
According to Mr Platou, fewer shipments from Brazil, the second largest exporter after Australia, are affecting average hire costs for Capesize vessels used to transport the commodity,.
According to the Baltic Exchange, capesizes, the largest ships that carry iron ore and coal, fell 11% to USD 10,023 daily, the most since August 15th. Rates are 37% lower this month. The Baltic Dry Index, a wider measure of shipping costs, slid 4% to 900 today, the most since January 26th.
According to Clarkson Plc, China’s November iron ore imports climbed 17% from the previous month to 65.8 million tonne, the highest since January 2011. China is estimated to import 65% of the world’s 1.11 billion tonne of ore shipped by sea.