Iron ore freight costs plummet

Freight costs for ore imported to China have been dropping an average US$2 per ton per day since October 9, the China Securities Journal reported, citing figures from Umetal.com. Freight costs for Brazilian ore shipped to the country dropped 40.18% to US$17.88 per ton on Tuesday from US$33.52 per ton a fortnight earlier. Freight costs for Australian ore have declined 35% over the period from US$11.60 per ton to US$7.54 per tons. Industry watchers say the drop reflected bleak demand for iron ore as a result of decreased production across Chinese steel mills. The Securities Times reported last week that four Chinese steel mills, including Beijing Shougang (000959.SZ), Angang Steel (000898.SZ), Hebei Iron & Steel Group and Shandong Iron & Steel Group would cut production by 20% this year due largely to fewer orders and greater pressure on operating costs. Hebei Iron & Steel Group then told China Business News early this week it had decided to curb production a further 10-20%.