India iron ore firm cuts prices to $189 for China deal

MUMBAI: An Indian trader cut iron ore prices further to $189 per tonne for a Chinese buyer, the lowest in nearly two months, and overseas traders were unwilling to place new deals waiting for further price falls, taking a cue from declining steel prices.

"Buying is still limited, yesterday evening an exporter sold at $189 (per tonne)," said Dhruv Goel, managing partner at iron ore trader Steelmint.

He sees the prices declining to $185 "very soon".

The exporter in the eastern Indian state of Orissa, the largest iron ore producing state, sold 44,000 tonnes of 63.5/63 grade ore, and was uploaded at the port of Paradip in the state.

Overseas spot iron ore prices fell for a third straight day on Thursday amid expectations that prices are likely to fall further due to thin trade and weak steel prices.

The Steel Index's 62 percent iron ore benchmark slumped by $3.4 to $184.9 per tonne, including freight, the lowest level since Jan. 19.

The benchmark rebar contract for October delivery at the Shanghai Futures Exchange was at 4,892 yuan per tonne, down 1 percent from the previous close and also hitting the lowest in nearly two months.

Goel said "quiet a few cargoes were available", but were not getting sold, adding prices may correct by $10-12 in a week or 10 days.

Indian iron ore futures, which is of 62 percent grade, was steady at 8,067.50 rupees per tonne.

Iron ore prices have risen around 13 percent this year, adding to gains of more than 40 percent in 2010, partly spurred by a ban on exports from India's Karnataka state, which is currently being appealed by exporters.