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China Iron Ore Demand to Boost Shipping, Morgan Stanley Says |
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Friday, 03 July 2009 |
 Chinese iron ore usage will boost demand for shipping as imports of the steelmaking raw material will remain cheaper than domestic output, Morgan Stanley said.
“We believe Chinese iron ore demand will put incremental pressure on the seaborne market,
as domestic mines are uneconomical,” Morgan Stanley said in a note to
clients today. The bank raised price estimates for the steelmaking
ingredient by 42 percent for Australia and 27 percent for Brazil.
Steelmakers in China, the world’s biggest producer of the alloy, may
trim the price cut they’re seeking for iron ore and aim to agree to
annual supply contracts by the end of this month, Tian Zhiping, vice
president of Hebei Iron & Steel Group, said by phone today.
China’s demand for iron ore has boosted the Baltic Dry Index, a measure
of dry-bulk shipping costs, as much as fivefold this year and led to
record queues of ships waiting to discharge consignments of the raw
material.
Source: Alaric Nightingale, Bloomberg
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