NEW DELHI: Iron ore prices in Asia rose in the week to Thursday as a major Indian producing state banned exports, although physical trading remained thin as lower steel prices in China cast doubt on demand.

The southern state of Karnataka, which accounts for about one fifth of India’s total exports of over 100 million tonnes, banned iron ore from going out of 10 ports and stopped transport of material meant for foreign markets. “Karnataka is seasonally the largest exporter at this time,” a senior trader working for a Chinese trading firm in New Delhi said. “So in effect, a lot of iron ore would just be gone from the market.”
Prices of iron ore may move higher if shipments decline from the world’s third-largest supplier of the steel-making ingredient as a result of the ban, traders said. Still, any increase would likely be small as China is sourcing good quantities of iron ore from its biggest suppliers Australia and Brazil as well as other countries.
In China, steel prices slipped this week after a rapid but short-lived jump last week, with traders worrying about the sustainability of demand over the rest of the year as a result of government policies aimed at curbing overheating in the real estate sector.
On Thursday, China consultant Mysteel quoted imported ores with 63.5 percent iron content at $140 a tonne with freight, up 3.7 percent from $135 a week ago, and about 12 percent higher since mid-July on a small revival in Chinese buying.
The Steel Index 62 percent iron ore index was at $135.10 a tonne on Wednesday, down $1.2 on from the previous day, but up 15 percent from the lowest level since December seen earlier this month. Local freight costs were stable over the week with India’s eastern ports Paradip and Visakhapatnam quoting about $15 a tonne for single port loading destined to main port China, a trader in east India said.