The cost of iron ore shipped to China exceeded the average price of locally-mined supplies for the first time in five months, ending a price arbitrage that helped push November imports to the second-biggest on record.
The price of ore with an iron content of 62 percent landed in Tianjin port rose for a sixth day, advancing 1.2 percent to $124.90 per dry metric ton, the highest since July 20, according to The Steel Index.
The average price of ore of a similar quality mined in China averaged $121.60 per ton on Dec. 10, the last day data was provided, according to data compiled by Bloomberg from Antaike Information Development prices. On Monday imported prices rose above the cost of the locally produced steel-making ingredient for the first time since July 11, the data show.
“There is no workable arbitrage,” RS Platou Markets AS, an Oslo-based investment bank, said in an e-mailed report today. “Brazil exports have been particularly quiet in the last few weeks.”
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 Platou.
Capesizes, the largest ships that carry iron ore and coal, fell 11 percent to $10,023 daily, the most since Aug. 15, according to the Baltic Exchange, a London-based assessor of freight costs. Rates are 37 percent lower this month, data show. The Baltic Dry Index, a wider measure of shipping costs, slid 4 percent to 900 today, the most since Jan. 26.
China’s November iron-ore imports climbed 17 percent from the previous month to 65.8 million tons, the highest since January 2011, data show. China is estimated to import 65 percent of the world’s 1.11 billion tons of ore shipped by sea, according to Clarkson Plc, the largest shipbroker.
Average hire costs for Panamax ships, the largest to transit the Panama Canal, fell 1.6 percent to $7,263 daily, while Supramaxes, about 25 percent smaller, were little changed at $7,853 daily. Handysizes, the smallest tracked, climbed 0.1 percent to $6,588 daily, according to the exchange.
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