Sydney - Tuesday - May 25: (RWE Aust Business News) - from Platts, a leading global energy and metals information service provider. Prices of seaborne iron ore imported into China have fallen by more than 20 per cent in a month, from a peak of $US186 per metric ton (/mt) on April 20, 2010 to $US147.5/mt yesterday, according to Platts data. Platts became the first independent publisher to provide daily price assessments for iron ore reflective of the transactable value in the spot open market. The drop in value of this benchmark iron ore - the key steel-making ingredient shipped into China, the world largest steel maker - mirrors similar declines for basic raw material commodities around the globe. China imports more than 60 per cent of the world's seaborne iron ore supplies. "Concerns over sovereign debt in the Eurozone seem to be hitting all key commodities globally," said Jorge Montepeque, Platts director of market reporting. "These primary industrial inputs are being affected by the recent market bearishness over concerns of possible economic contraction and thus, resource need reductions, resulting from the broader sovereign debt." Prior to Platts' introduction of daily price assessments in this benchmark iron ore, known as IODEX and reflecting 62 per cent Fe (iron) content, the commodity's pricing was traditionally established by the iron ore industry through a once-yearly single auction and long-term contract process. Steel prices are also on the retreat, Platts data shows. Hot rolled coil, the base material for the automotive and so-called white steel good industries, is also being knocked by the bearish tone in many world markets, says Francis Browne, Platts global director of steel and metals market reported. Prices for steel coil destined to Europe and the Middle East have lost more than $US80 per metric ton over a similar month-long period as for iron ore, with base steel material now trading at $US585/mt in the Black Sea, a price level not seen since March 25, 2010, he said. "History shows a tight correlation between economic concerns and the down-trending financial markets to base materials prices," explained Browne. "For example, iron ore hit a low of $US57.00 per metric ton in November 2008 at a time when the 'credit crunch' buffeted financial and commodity markets." Platts' price assessments are underpinned by a robust methodology of guidelines and quality protocols. Its IODEX assessments are based on all-day market monitoring and data collection of transactions, bids, offers and other information from market participants during the Asian business day until the market close at 18.30 hours Singapore time. The data is normalized and a neutral origin 62 per cent Fe content iron ore fines price assessment is published immediately in Platts' Metals Alert (PMA), a real-time metals price and news wire service.
