IRON ORE PRICE INCREASE NOT SUSTAINABLE

Iron Ore fines 62% Fe spot CRF Tianjin port quoted at 139,80 USD last Friday January 20th, 2012.

This quote represents a price decrease of 5.2% from the price pike of 147,40 USD of November 18th, 2011.

The bad weather conditions of the last weeks in Brasil and Australia will not have a dramatic impact in ore prices, as shown, due to huge amounts standing in China ports bonded warehouses, waiting for auctions.

Depress market situation in Europe and lower demand in Asia will not permit to transfer raw materials price increase to steel products prices.

Mining companies are obtaining much higher operating margins than steel companies, which will result in commodities price reductions, eventhough bad weather conditions, as reported, could have a limited and temporary effect in spot markets.

As reported by EL BLOG DEL ACERO STEEL BLOG January 21st, BDI Dry Baltic Index and CRB Commodities Research Bureau Index are going down in a continuous basis.

Some Steel Webs are reporting Iron Ore price increases. We beg to differ to this opinions, as shown.