MARKET TALK: Monthly Iron Ore Pricing Shows Need For Swaps-FIS

9th Jun 2010 03:58

0258 GMT [Dow Jones] Chinese steelmakers, iron ore mining companies BHP Billiton (BHP.AU) and Rio Tinto (RIO.AU) making no comment on report in Metal Bulletin that some iron ore contracts being priced on monthly rather than quarterly basis but little reason to doubt report. Iron ore trader at one of the mining companies says, "we've already acknowledged the move towards market pricing (in previous statements)." Spot iron ore price for 62% fines was at $145.86/ton on cost and freight basis, down from $185/ton in late April, according to data from iron ore swaps broker FIS. The broker says monthly pricing shows "the need for iron ore swaps is looking even greater." Forward curve currently in backwardation with swaps at discount to spot; July swaps bid at $133/ton, according to FIS. Steelmakers, miners and trading houses use iron ore swaps, which are cash settled, to hedge exposure to physical iron ore. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires June 08, 2010 22:58 ET (02:58 GMT)