China World Trade Information

India's iron ore prices fell nearly 4 percent from a week ago despite talk of short supplies, as steel stockpiles weighed and trades slowed ahead of the Chinese new year next month, traders said. "Prices have fallen slightly this week. Some traders I know have stopped buying," said a trader based in Shanghai. "The steel mills I'm in contact with in southern China have about a month or two of (ore) stockpiles. But there hasn't really been much of a change in the (tight) supply situation on the spot market," the trader added. Supplies were tight because of fewer transactions as traders looked forward to a week-long holiday for China's new year starting February 14 and high congestion at some China ports <GP/CONGESTION>. On Thursday, China consultant Mysteel said transactions had slowed considerably, with Indian ores containing 63.5 percent iron selling at $130-$132 a tonne C&F versus $135-$137 a week ago. Despite the decline this week, Indian 63.5 percent fine prices are still up 64 percent since last September, Mysteel said. Steel prices in China, which provide an indicator to iron ore traders fell this week on lending cuts by the government and concerns over an oversupply of steel in the world's largest manufacturer. SUPPLIES CONSTRAINED Supplies of high grade Indian ores were constrained in India as a prolonged government action against illegal mining continued in the eastern state of Orissa, the country's largest iron ore producer. A government official in the state said about 65 mines remained shut and inspections were planned for many more. In the southern state of Karnataka, which produces both high and low grade ores, restraints on transport permits slowed ore movement, an executive in a large iron ore mine said. "We are operating out of Goa (west India state) and Orissa and that too, just for trading -- we are buying from other mines and selling to clients," the executive in the Karnataka mine said. Freight rates fell on increasing availability of vessels and the slower iron ore appetite of China. The Baltic Exchange's main sea freight index .BADI dropped 1.56 percent, or 50 points to 3,158 points on Wednesday. But a miner-cum-exporter in Goa said the spot freight rate from Goa to a mid China port was at $26-$27 a tonne, nearly the same as last week.