One report does not make a change but interesting nonetheless.
There's probably another report out there somewhere countering it...
China fixes vessels for India ore
November 25, 2008
CHINA has chartered 17 vessels to import nearly one million tonnes of Indian ore since November 17, Imarex has noted.
“China could be showing they have more iron ore and steel demand than most currently believe,” Norwegian-based Imarex, the world's largest shipping derivatives trader, said in its report.
“Or, they could just be building up stocks to ensure 2009 contract prices are secured at a hefty discount (Chinese port stockpiles fell 1.3 million tonnes last week to 68.8 million tonsne)."
The Imarex report is consistent with a Macquarie report, which said smaller Chinese steel mills were buying iron ore on the spot market.
“The fall in spot raw material prices has been faster than the fall in steel prices recently, and the enhanced margin has induced some smaller mills to reopen," Macquarie said.
The Macquarie report added that smaller Chinese steel mills were not obliged to pay contracted prices like their larger peers, so can use the spot market to buy inputs and produce steel profitably.
Dow Jones Newswires